Get ready for the (soft?) US jobs number
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Why are US non‑farm payrolls expected to be soft this Friday?
It's jobs day, non-farm payrolls for the United States, which could be another soft one. After all, job openings were weak this week. The ADP numbers halved. The Challenger Job Survey showed more layoffs. Non-farm payrolls would really be going against the trend if it came out stronger today. But the US services ISM, that was stronger than expected. We'll look at that. Plus, what's going on with bond yields? They're coming down a bit. Everywhere. It's Friday, it's the fifth of September 2025. It's the morning call from NAB. Good morning. Well, shares are gallivanting higher in the United States. Well, gallivanting might be uh putting a bit of a an edge on it. Uh but they're up at least anyway. And in fact, the S P closed uh six thousand five hundred and two, which is a new record, up not point eight percent today, only just a new record.
Uh nort point eight percent added to the Dow as well, and uh one percent added to the Nasdaq. Uh higher in Europe as well, the DAX closed up three quarters of one percent, not point four percent for For the Eurostocks fifty and for the FTSE one hundred. The US dollar has edged up slightly today, up naught point two percent on the DXY, but the Aussie is down over naught point four percent this morning, down to below sixty five point two US cents. The pound and the euro are down about naught point one percent, the Swiss franc down a quarter percent, the uh yen is down naught point three percent, and bond yields down again, down four basis points for ten year treasuries, down to four point one. Eight percent.
So we're getting back to the sort of levels that we were at in May. But 30 year treasuries are down less than two basis points to 4.88%, so a bit of steepening in the curve.
How did the ADP report and Challenger Job Survey signal weaker US labor market trends?
And two years got down to 3.6% today, which is the lowest in a year. And yields down two basis points for 10 years in Germany and three in the UK and down five in France. And oil down again, 0.9% off WTI. 1% off Brent, which is nudged below 67 a barrel. Gold has come off its high as well and is down naught point nine percent today. And here's Nabs Ken Compton in Sydney. So everyone is uh jostling for position ahead of non farm payrolls. But I guess you know equity markets doing well. I guess they think, well, if it's a soft number, uh that means the Fed will uh will keep on track those rate cuts rather than looking and thinking, well, you know, people lose their jobs, that means they've done Money in their pocket, they can't buy stuff, so that's you know ultimately not terribly good.
But it seems to be very much a uh you know, rate cuts down, good for business.
Yeah, good morning, Phil. I think that's a pretty reasonable summation of uh of the of the psychology of some of the market reaction over the last little while. But I mean, even if you are looking for um non farm payrolls tonight to lead you to a rate cut, it's probably hard to see too much of a lead-in that's gonna take you anywhere else. I mean, a few bits of US labor market data out overnight, none of them um sort of overly challenging to that narrative, although not necessarily universally soft either. either. But you know, look initial jobless claims up a little, uh bitch two thirty seven K, stronger than consensus. So that that's lifted the four week average up to two thirty one. Still if you put that on a longer run historical chart, that's to be honest, hardly a a particularly terrifying number.
But you know, but I Once again it's sort of remained elevated for the past year or so.
So it's not all bad news, is it?
Weeks number was revised down a touch. So you could probably argue maybe the continuing claims number stabilising. So once again, you you may be um I guess as as Ray sort of highlighted the risk yesterday, probably a risk of um overanalysing the entrails a little bit, but but you could look for a bit a bit of confidence there.
What does the stronger ISM Services index mean for the overall US economy?
But on the other hand, if you go and look at the go and look at the ADB re uh ADP report, that was up fifty four K for the month. Um that was sort of our undershot expectations there by about fifteen thousand.
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Chapters
8 chapters
1
Why are US non‑farm payrolls expected to be soft this Friday?
0:01–1:35
2
How did the ADP report and Challenger Job Survey signal weaker US labor market trends?
1:35–3:27
3
What does the stronger ISM Services index mean for the overall US economy?
3:27–6:10
4
How are bond yields and global equity markets reacting to the latest US data?
6:10–8:12
5
Will tonight’s payroll numbers influence the Fed’s September rate‑cut outlook?
8:12–10:05
6
What are the implications of the divided Fed commentary from John Williams and Beth Hammock?
10:05–12:24
7
How are global bond auctions and treasury positioning affecting long‑end yields?
12:24–14:54
8
What other economic releases (German factory orders, Canadian unemployment, etc.) could shift market sentiment today?
14:54–16:27