The U.S. non-farm payrolls report for January, released on Wednesday, showed that non-farm payrolls rose by 130,000, about twice the median forecast of economists surveyed by Bloomberg. The unemployment rate unexpectedly dropped from 4.4% to 4.3%.
Fed officials had already pointed out at last month’s policy meeting that signs of economic stabilization were a reason to keep interest rates unchanged. The report released by the Bureau of Labor Statistics on Wednesday prompted traders to lower the probability of a rate cut at the June meeting (which was previously widely seen as the most likely time for the next rate cut) to below 50%.
“This undoubtedly makes the argument for lowering interest rates more complicated,” said Tim Mahedy, a former senior adviser at the Federal Reserve Bank of San Francisco. “The January data was very strong.”
Economists have warned that the optimistic data for January may still be revised downward, and that hiring remains concentrated in a few sectors, especially healthcare. The revision of the data for the same period last year shows that the average monthly increase in jobs was only 15,000, lower than the initially reported 49,000.
Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets LLC, said the January rebound will ease concerns that the unemployment rate will continue to rise, after worries about the impact of artificial intelligence and companies’ suspension of hiring plans.
Stanley said, “The January employment data should undoubtedly put to rest the notion that the labor market is on the verge of collapse, a claim we often heard from some dovish members of the Federal Reserve.”
President Donald Trump continued to call for further interest rate cuts. After the release of the employment data, Trump posted on social media praising the “very good employment data” and stating that the United States should have the lowest interest rates in the world.
Kevin Hassett, director of the National Economic Council under Trump, told Fox Business that “the Fed has a lot of room to cut interest rates,” noting that the huge supply shock brought about by artificial intelligence will boost economic growth without causing inflation.
Trump once said that he would nominate Kevin Warsh to replace Jerome Powell as the chair of the Federal Reserve, whose term will end in May. Warsh also expressed similar views.
Technical analysis:
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Gold: Yesterday, our plugin alerted us to the liquidity sweep in the yellow zone. As expected, after the release of the non-farm payroll data, the price rapidly dropped to the yellow zone and then rebounded. Today, we will focus on a direct breakthrough in the blue zone, with the first target being around 5100. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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The Nasdaq: The performance of the non-farm payroll caused overnight US stocks to fluctuate, with prices remaining within the range of 25,000 to 25,400. Intraday, the price has somewhat consolidated, and currently shows a slight upward breakout tendency. We suggest going long in the short term, and be mindful to take profit and set stop-loss orders at a ratio of 1:1 and 1:2. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: Yesterday, the blue zone we were alerted to by the plugin broke through the buy stop, achieving a profit-to-loss ratio of around 4 times. Currently, the price is fluctuating and falling back, retesting the demand zone left by the overnight break. We can try the green zone’s buy limit operation again. For the exact position, please consult the plugin.
(Crude Oil 15-Minute Chart)
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