05.09.25 - All depends on job numbers
Yesterday’s ADP private payrolls report showed an increase of just 54’000 jobs in August, below expectations of 65’000 and sharply down from the revised 106’000 in July. At the same time, weekly jobless claims rose to 237’000, an increase of 8’000 versus the prior week and above consensus estimates. Taken together, these figures add weight to the view that the US labor market is slowing.
All eyes are now on today’s official US nonfarm payrolls (NFP) release, expected to have risen by 75’000 in August 2025.
Markets: equity markets have largely shrugged off the data so far
US markets trading near all-time highs
Gold hovering around USD 3,550/oz level
US 10-year Treasury yields fell below 4.2% level
US dollar is trading sideways
My View: Markets have been rising on hopes that weak jobs data will lead to rate cuts, embracing bad news as good news. But there are some risks: if the upcoming NFP report confirms not just a cooling labor market but genuine recessionary signals, investors may find themselves facing a sharp reality check. What looks like a cushion for rate cuts could just as easily turn into the trigger for a broader downturn. The danger lies in the shift from “weak but manageable” to “weak and alarming.”
On the other hand, significantly stronger job data than expected would temper rate-cut bets and could trigger a pullback in risk assets.
Overall, markets are treading a very narrow path — caught between hopes of policy easing, the risk of recessionary signals, and the possibility of a still resilient economy.
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