BlockBeats message: On October 3, this week the U.S. added only 29,000 jobs in September nonfarm payrolls, far below market expectations of 90,000. The August figure was also revised down by 133,000. The unemployment rate rose to 4.2%. After the nonfarm release, market expectations for a Federal Reserve rate hike in October cooled noticeably. CME’s “FedWatch” showed the probability of holding rates unchanged in October rose to 83.9%, while the probability of a rate hike in December was 66.1%. Meanwhile, the yield on 10-year U.S. Treasuries briefly climbed to 5.36%, and the U.S. Dollar Index hit a 17-month high.

Next week, market attention will focus on the Federal Reserve’s September meeting minutes, the G7’s release of strategic oil reserves, long-end U.S. Treasury yields, and events such as the U.S. ISM Non-Manufacturing PMI.

Regarding the Federal Reserve, the September meeting minutes will be released at 2:00 a.m. Beijing time on Thursday. As the market has largely shifted its focus from whether to raise rates in October to whether to raise rates in December, the minutes’ discussion of inflation and employment risks, divergences among officials on further hikes versus pausing hikes, and whether the wording is more hawkish or more dovish than the post-meeting statement will be key highlights. In addition, Fed Governor Bowman and St. Louis Fed President Musalem will also deliver speeches next week.

In the bond market, the U.S. Treasury will announce the repo operation size for 20- to 30-year Treasuries and conduct auctions for 10-year and 30-year Treasuries. The 10-year U.S. Treasury yield is currently at a level not seen in more than 20 years. The Treasury’s repo size and the state of demand for Treasuries will become key variables to watch when assessing the trend of long-end yields.

In the energy market, the G7 agreed to release 100 million barrels of oil and diesel reserves to ease energy supply pressures. The International Energy Agency will be responsible for coordinating the relevant supply. Meanwhile, the market expects OPEC+ to keep its November production target unchanged, but disruptions around the Strait of Hormuz involving shipping and energy infrastructure have not been fully eliminated, so oil prices may continue to trade with high volatility in the near term.

On gold, although weak nonfarm payrolls reduced expectations for near-term rate hikes by the Federal Reserve, gold prices failed to extend their gains, with spot gold down nearly 2% for the week. The market is still being weighed down by rising U.S. Treasury yields. Whether gold can regain momentum next week will depend on changes in long-end yields and developments in geopolitics.

On the data front, the U.S. September ISM Non-Manufacturing PMI will be released on Monday at 22:00, with a market expectation of 55.1. The initial reading of the University of Michigan consumer sentiment index for October will be released on Friday, with a market expectation of 47.6. In addition, the European Central Bank will release the minutes of its September meeting. Japan’s Bank of Japan Governor Kazuo Ueda will also speak, and India’s central bank will publish its interest rate decision.

In the U.S. stock market, next week will enter a gap period before the second-quarter earnings season. The impact of macro variables on market pricing may further increase. The market will continue to focus on how AI capital expenditures, energy costs, and financing conditions affect corporate earnings, while whether the 10-year U.S. Treasury yield can fall back from its over-20-year high will remain an important variable for growth stock valuations and the performance of risk assets.