U.S. September non-farm payroll data far exceeded expectations, leading traders to significantly reduce bets on a Fed rate cut
The U.S. non-farm payroll data for September exceeded expectations, with an addition of 254,000 positions and a decrease in the unemployment rate to 4.1%. Traders significantly lowered their expectations for a rate cut by the Federal Reserve, ruling out the possibility of a 50 basis point cut in November and expecting a 25 basis point cut instead. The 2-year U.S. Treasury yield rose by 17 basis points to 3.87%, while the 10-year yield rose by 12 basis points to 3.96%. Gregory Faranello of AmeriVet Securities stated that this is a strong employment report, intensifying the debate on the future rate cut trajectory
According to the VESYNC financial APP, after the September non-farm payroll data in the United States exceeded expectations and showed a strong hiring trend, traders significantly lowered their expectations for future rate cuts by the Federal Reserve. The money market currently rules out the possibility of a 50 basis point rate cut by the Federal Reserve in November, with an expected cut of 25 basis points at that time. In addition, the forward contracts linked to the results of future Fed policy meetings only reflect a cumulative rate cut of about 56 basis points in November and December, which is 10 basis points lower than before the non-farm payroll data was released.
At the same time, the yield on the two-year U.S. Treasury note, which is sensitive to policy changes, rose by 17 basis points to 3.87%; while the yield on the ten-year U.S. Treasury note rose by 12 basis points to 3.96%.
Data released on Friday showed that the number of new non-farm payrolls in the United States in September was 254,000, far exceeding the market's general expectation of 150,000 and the previous value of 142,000, also surpassing the highest value predicted by economists; the unemployment rate dropped from 4.2% in August to 4.1%.
Gregory Faranello, Managing Director of U.S. Interest Rate Trading and Strategy at AmeriVet Securities, said, "Overall, this is a very strong employment report. Against the backdrop of improving data this week, the U.S. interest rate market has been leaning towards higher yields and consolidating, with the employment report adding to the positive sentiment." He expects the Federal Reserve to continue cutting rates, but after today's data release, the debate over the future rate cut path will intensify