June Non-Farm Payrolls Data May Cool Down, Market Expects 110k New Jobs, Fed Policy Path in Focus

BlockBeats News, July 2nd, Beijing Time: Tonight at 20:30, the U.S. will release the June nonfarm payroll report. The market generally expects the number of new nonfarm jobs in June to be 110,000, lower than May's 172,000; the unemployment rate is expected to remain at 4.3%, with average hourly earnings increasing by 0.3% month-on-month.

Around the June data, the market is focusing on two core issues: first, whether the labor market continued to tighten after May, and second, whether the strong performance in May was disrupted by one-off factors, especially the short-term employment demand brought about by the World Cup. This will directly affect interest rate expectations. The current stabilization of the U.S. labor market has reduced the need for further Fed rate cuts. Unlike the rate-cutting measures taken last year, the financial market currently generally expects the Fed to possibly raise rates at some point during the year to address inflationary pressures. However, if employment unexpectedly weakens, this expectation could quickly reverse.

If the employment data is stronger than expected, the market may further reduce rate cut expectations, or even reintroduce the possibility of a rate hike, putting pressure on high-valuation assets such as tech stocks. If the data is significantly weak, it may boost rate cut expectations, but it will also raise concerns about U.S. economic growth and corporate profit prospects.

The market is also paying attention to the performance of assets such as the U.S. dollar, U.S. bond yields, and the Japanese yen exchange rate.