The significant slowdown in employment growth in the United States in June has led the market to reassess the policy path of the Fed in the coming months. Following the release of the data, interest rate markets have been retrenched against interest rate hikes as early as possible during the year, with high United States stock futures and lower rates of return on United States debt, while bitcoin has remained above $61,000.

Non-farming lower than expected June

The non-farm employment report released by the United States Government on Thursday shows that 57,000 new jobs were added in June, down from the estimated 110,000 expected by economists, and significantly below the 129,000 that was revised in May. At the beginning of May, the value was 172,000, which was subsequently repaired.

The unemployment rate was 4.2 per cent, slightly better than the market forecast of 4.3 per cent and lower than in May. This means a slowdown in employment growth, but the unemployment rate is not rising simultaneously.

  • New non-farm employment in June: 57,000
  • Market expectations: 110 000
  • Unemployment rate: 4.2%

The interest rate bets are coming back fast.

Prior to the release of this set of data, the market continued to absorb the pressures of rising inflation and rising energy prices. Two weeks ago, the Fed released a hawk signal at the conference, which also raised investors’ expectations of a higher interest rate this summer or early autumn.

This determination was adjusted after the data were published. According to CME Fedwatch, the probability that the market would have increased interest rates at least once before September was about 65 per cent, and within a few minutes after the data were released, this probability was reduced to 50 per cent.

Bitcoin is holding $61,000.

The asset prices were then linked. According to the report, Bitcoin was clearly strong before the data were released, increasing by about 4 per cent 24 hours and remaining above $61,000 after the data were released.

United States stock forwards are also up, with the NASDAQ 100 index futures moving from near flat to 0.7 per cent before data release. At the same time, the annual rate of return on national debt in the United States fell by 4 basis points to 4.46 per cent, reflecting the market ' s expected cooling of subsequent contractions.

Overall, weak employment data temporarily weakens the market ' s judgement of short-term interest rates and underpins risk assets. However, inflation had previously shown signs of rising, and energy prices remained the focus of follow-up observations.