Non-farm unchanged market weight reduction expectation

11 Oct, 2021

The US dollar fell and gold took back gains

The US dollar index fell 0.09% to close near 94.13 in late trading. The yield of 10-year US bonds rose to 1.60%, and the US 10-year breakeven inflation rate rose to 2.69%, the highest level since May, and then retook its gains. The employment report released by the U.S. Department of labor on Friday showed that non-farm jobs increased by 194,000 in September.

Spot gold rose and fell. Spot gold closed at US $1757.13/oz, almost retrenching its gains during the day. It rose sharply by 1.46% during the session, refreshing its high since September 22 to US $1781.41/oz. COMEX December gold futures fell 0.1% to US $1757.40 / ounce.

Dow securities analysts said the Fed is expected to reduce QE next month. September was less than expected, but the potential details were not so terrible. Therefore, it was finally in line with the expectation that the Federal Reserve announced the reduction of quantitative easing next month. Disappointing employment data could lead to a decline in the dollar, but any such weakness could be fleeting. The market will need more convincing evidence, just a weak employment report, which can not be digested by the market. The Fed will delay its action until the end of 2022 and after 2023.

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