Happy jobs Friday.
In the bigger picture, this isn’t a pivotal jobs report for the economy. There’s some slowing baked in and the Fed will get another non-farm payrolls report before the September FOMC decision.
What’s changed the game is the market — specifically the bond market — shooting higher in a pure flight to safety. The moves in yields and Fed pricing (30% chance of 50 bps in Sept, cuts priced for six straight meetings) are pointing to something ominous in the economy and equity markets are wilting, including a 5.8% drop in the Nikkei overnight — the worst since 1987.
That’s left everyone on edge.
I’m also sympathetic to the idea that even a stronger print will lead to strong dip buying in bonds.
Check out my non-farm payrolls preview for all the numbers that are expected.
This article was written by Adam Button at www.forexlive.com.
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