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US payrolls and AI earnings set up volatile week for rates expectations
Markets have only about a 65% chance of a September rate hike priced in after the latest Fed signaling, with the 30-year Treasury yield at its highest since 2007.
Action Forex said the week is likely to be driven by the upcoming US nonfarm payrolls report as investors look for clues on how soon the Fed may raise interest rates.
The outlet pointed to recent uncertainty around the Fed policy path, citing comments by Fed Chair Kevin Warsh that reportedly reflect mixed messaging on whether a September rate hike is needed to return inflation toward the Fed’s 2% goal.
In rates-linked market pricing, September rate hike odds are described as only about 65% priced in versus being fully baked in before the prior meeting, while bond markets pushed the 30-year Treasury yield to the highest level since 2007.
The calendar also includes multiple US jobs indicators and surveys, including the ISM manufacturing PMI, ISM services PMI, ADP private employment, Challenger Layoffs, and analysts forecast payrolls to rise from June’s 57k print toward 91k.