June non-farm payrolls preview by the numbers: ADP sends a chill through the market
As Trump continues to pressure Powell into cutting rates, a poor report here will just add fuel to the fire. But how are markets positioned going into things?
A 25 bps rate cut for September is fully priced in and another in October is almost there as well. By year-end, there's ~67 bps of rate cuts priced in i.e. at least two 25 bps rate cuts and closer to three. So, bad data today should keep the pressure on the Fed to cut consecutively starting from September at least.
While the data here relates mostly to the Fed and economic outlook, there are still other major considerations for the central bank. The first as mentioned, is how things are going to play out on the trade front. Then back home, policymakers will have to see what lawmakers make do of Trump's "big, beautiful bill".
Markets are looking to September next for the first move and unless the Fed communicates otherwise, that will still be the base case outlook no matter what the US jobs report says today. Keep that in mind in case we get a kneejerk reaction to better numbers in the immediate aftermath.
This article was written by Justin Low at www.forexlive.com. Read More Details
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