Nonfarm payrolls rose by 165,000, far above expectations of 65,000, and September’s figure was also revised up to 60,000. Strong job growth, low unemployment, hot wages, and an upward revision to the previous figure all point to the Fed having more room to raise rates. The prediction market’s odds of a December rate hike jumped straight from 72% to 80%, and markets took another sharp hit tonight. CPI is due next Tuesday, followed by PPI on Friday. Once next week’s data hits, I reckon the odds of a December hike will be around 95%.
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清水研市
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Here’s my take on tonight’s nonfarm payrolls report: the broader market will plunge again, regardless of whether the figures beat expectations. If they do, another sharp drop is inevitable. If they come in as expected, we’ll first see a small rebound, followed by another major plunge. That’s because CPI is due next Tuesday and PPI on Friday. Investors will use any small rebound to exit, and a large-scale buying-the-dip move is unlikely before these two potential market headwinds land next week.