Michael Every, Head of Financial Markets Research at Rabobank, suggests that it’s blindingly obvious what market attention will be focused on today as the headline expectation for the US NFP is a decent 180K, down from a blistering 255K in July.
“However, a word of warning. As Bloomberg has recently noted, August tends to see downside surprises to expectations in this key series. Hence we might end up with another ‘oops!’ moment, just as we did back in early June with the May jobs data, which subsequently pushed the Fed off the hiking trail (if they were ever really on it) in the summer.
The importance of that US employment print today can’t be overstated. After all, yesterday saw a collapse in the US manufacturing PMI back to 49.4, dragging the Dollar index down 0.6% with it. Elsewhere, 10-year US Treasuries tumbled back to 1.57%, having peeped their heads over 1.60% for the first time since early August, while equities closed either slightly down or unchanged.”
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