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NFP comes in below expectations!
BY Janne Muta, M.Sc in Finance|August 4, 2023
The latest NFP data comes in lower than expected with only 187K jobs added as against the anticipated 205K. This lower number is a continuation of the US jobs market cooling down (prior: 209K). The unemployment rate came in at 3.5% vs 3.6% expected with the participation rate unchanged at 62.6% (62.6% prior).
The Average Hourly Earnings have ticked higher, standing now at 0.4%, higher than the expected 0.3%. On the annual level earnings at 4.4% y/y vs +4.2% expected raises the question of whether this data could increase expectations about future inflation and Fed policy.
The initial market reaction has been to sell the dollar and buy the stocks. This indicates that both currency and equity traders are focusing on the headline employment number and take it as a confirmation that the Fed isn’t hiking the rates any time soon. The initial reactions aren’t always a reliable indicator of market direction though. It makes sense to wait for the New York open though to see how the wider trader and investor base sees today’s numbers impacting the markets.
Chief Market Analyst
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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.
DISCLAIMER: Tio Markets offers an exclusively execution-only service. The views expressed are for information purposes only. None of the content provided constitutes any form of investment advice. The comments are made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances, or needs. The content has not been prepared in accordance with any legal requirements for financial analysis and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval.
Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.
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