USD: Fed Unlikely To Respond To One Weak NFP Print But A Rate Cut In Q4 Now Likely – CIBC


The US jobs report came out below expectations and led to speculation of a rate cut. What’s next?

Here is their view, courtesy of eFXdata:

CIBC Research discusses its reaction to today’s US jobs report for the month of May.

US payrolls printed weaker than expected, which will further increase bets that the Federal Reserve will be cutting interest rates before the year is out. The 75K gain during May was well below the 175K consensus, and net downward revisions to the prior months took away that gain leaving the level of employment unchanged relative to the prior release. Hourly earnings were also a little light of expectations at 0.2% m/m and 3.1% y/y, with that annual rate the lowest since September. A stronger gain in employment on the household survey meant that the unemployment rate held steady at 3.6%,” CIBC notes.

“Fed speakers have been hinting recently that they may be willing to cut interest rates given the uncertainty around trade and tariffs, and signs of a slowing economy will further push them in that direction. While they are unlikely to respond to just one payrolls print, we now expect that a slower economy and continued trade uncertainty could see a cut in Q4 of this year. The weaker than expected data have seen bond yields and the US$ fall,” CIBC adds.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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