To The Moon

At 20:30 Beijing time tonight (Friday), the United States will release the highly anticipated non-agricultural employment data, and whether the panic selling will continue depends on tonight.

Precautions:

1. The market has returned to the trading state of "good news is bad news".

The "unexpected increase in job vacancies in the United States" and "higher-than-expected US consumer confidence index" released earlier this week both triggered a wave of selling, because good data will strengthen the Fed's determination to raise interest rates sharply.

If the non-agricultural data improves, it will trigger the Federal Reserve to raise interest rates for the third time.

2. Before the release of non-agricultural data, the trend of financial market was "disordered".

-The selling tide of US bonds continued, and the yield of 10-year US bonds rose to 3.2514% (getting closer and closer to 3.5%)

-The international gold price fell below US $1,700

-Bitcoin returns to below $20,000

-The rise of the US dollar index continued and rose to a 20-year high

-The US stock market actually rose, but the increase was not large (Dow Jones index rose 0.46%, S&P 500 index rose 0.3%, Nasdaq index fell 0.26%), which seemed to suggest that the overall situation may change

In the past, the phenomenon that US stocks, US bonds and gold fell simultaneously disappeared, and the stock market was telling the greatest possible evolution of the situation.

​3. Financial conditions have been tightened as a whole, and the efforts of the Federal Reserve have not been in vain.

The tone shift from the July meeting to Jackson Hole was a carefully orchestrated effort by the Fed to ease the financial easing that followed the July signal that a "slower rate hike may be appropriate".​​

4. This is the last non-agricultural report before the meeting of the Federal Reserve on September 22nd, which is very important for the decision-making of the Federal Reserve.

Economists expect non-farm payrolls to rise by 290,000 in August from 528,000 and the unemployment rate to hold steady at 3.5% (in line with the lowest level in 50 years). Figuratively speaking, economists expect non-farm payrolls to be nearly half less in August than in July, but this is not necessarily bad news, because the actual value is likely to exceed the "forecast value", which will be interpreted as a hot labor market.

If the data meets or even exceeds the market expectation (it is more likely to exceed the market expectation at present), coupled with the previously announced "improvement of consumer confidence data and unexpected increase in job vacancies", it is enough to push the Fed to raise interest rates by 75 basis points in September.

Now swap traders are betting that the likelihood of the Fed raising interest rates by 75 basis points at this month's policy meeting rises above 70 percent.

If the data is not as strong as expected, the view of raising interest rates by 50 basis points in September will prevail, but the final decision depends on the CPI data released by the United States on September 13th (betting on raising interest rates by 50 basis points in September is not a good deal).

At present, it is more likely to be better than market expectations:

-The number of people claiming unemployment benefits for the first time fell for the third consecutive week, falling to a two-month low

-Unexpected increase in job vacancies in the United States

-US manufacturing activity data is better than expected (companies continue to recruit strongly in August)

Against the background of all these data, this non-agricultural report becomes very important.

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