Worried about revisions
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Why did downward revisions to US non‑farm payrolls spark market concern?
So downward revisions caused the consternation in the non-farm payrolls numbers in the US on Friday, even though the unemployment rate came in as expected, but there are less people employed than expected. So does that secure a 50 basis point rate cut next week from the Fed? And why did the Aussie take such a big hit at the end of last week? Well, commodities, obviously a big chunk of it. And this week ECB and two big bits of news from the US, their CPI numbers, and that debate on Tuesday. It's Monday, it's the ninth of August 2024. It's the morning call from NAV. Good morning. Well, on the face of it, it looks like there wasn't much going on with the US dollar on Friday. That's mainly because it was being pulled in two directions.
So the Aussie dollar, for example, fell more than one percent to sixty-six point seven US cents. It got down to sixty-six point six at its low point, the sign of the devil, and falling again this morning. So it's getting back down there. The yen climbed naught point eight percent on Friday. Uh this a US dollar somewhere in the middle. And US stocks had another bad day. The NASDAQ NASDAQ lost two and a half percent in a day. The S P was one point seven percent down, the Dow one percent lower. That means in a week the Nasdaq lost five point eight percent, the most since November twenty twenty two. At the same time, Nvidia shares down almost fourteen percent last week, and S P also well down over the week, losing four and a quarter percent.
Bond yields fell further on Friday, another uh two basis points for ten year treasuries down to three point seven. one per cent uh more in there we'll we'll talk about their two year yields in a second. Down twenty eight in a month though for ten year treasuries.
How are global bond yields responding to the latest US jobs and inflation data?
In Germany, yields were down four basis points, down three in the UK. Aussie ten year yields fell to three point eight eight percent, actually the same as ten year guilt yields. And on futures now, Aussie ten years are a few basis points higher this morning, and oil quite a bit lower on Friday as well. Two point two percent off Brent down to almost seventy one a barrel. WTI down two point one one percent to below sixty seven point seven a barrel, big falls in copper and silver too, so it's all a bit risk gone, isn't it? Here's Nabs R uh Rodrigo Catrill, uh and a lot of this obviously relates to non farm payrolls on Friday, even though on the face of it, you know, it wasn't too alarming, was it? Because the unemployment rate came in as expected, falling from four point three percent to four point two percent.
Of course that's not the way the Fed wants it to go. But what's Spook the markets was the uh was the rise in job numbers and also the revisions for the previous two months. Yes, uh money filled so
As you say on on face value it was a bit of a mixed back and that the unemployment rate declined as expected. Um and then uh to four point two. Um and that that was also kind of the expectations were driven by you know, we had these autoplanned shutdowns um uh that had affected that July number, um and it was expected that there would be a little bit of a payback in in that regard and therefore an improvement in that. unemployment rate. Um but what actually did kind of you know triggered all this volatility in the market was um uh was the fact that uh the the job numbers the the numbers created wasn't as strong as expected um with also very, very s you know, significant downward revisions to the previous two months.
So overall when you look at non farm payrolls sort of pace of growth if you like the past three months Um in many in many regards that's the lowest since we since the middle of twenty twenty. So quite a sharp decline in terms of the number of jobs being created uh in in recent three months. And then and then just to add one more thing, it's been a a a a pretty constant pattern uh in this year where no farm pails get downwardly revised. So even the August number, which was quite weak, is very likely to be the re revised. Yeah. Well
yeah, that was that was the point I was gonna make. 'Cause if you look at you look at last month, uh one hundred and seventy six thousand was the expectation.
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Chapters
8 chapters
1
Why did downward revisions to US non‑farm payrolls spark market concern?
0:01–1:30
2
How are global bond yields responding to the latest US jobs and inflation data?
1:30–3:48
3
What do the steep cuts in US payroll revisions reveal about labor market strength?
3:48–5:49
4
How might the Fed’s dovish shift translate into front‑loaded interest‑rate cuts?
5:49–8:07
5
Why is the overall market showing slowdown signs beyond the tech sector?
8:07–10:14
6
What is a K‑shaped recovery and which sectors are winners or losers?
10:14–11:56
7
How is China pivoting to foreign investment to counter slowing demand?
11:56–14:24
8
How could the upcoming US presidential debate influence markets and Fed policy?
14:24–15:44