Prospects of 22 investment banks: US non-agricultural September may pry open the door of Fed rate hike

GMT + 8 Friday (October 8) 9 20:30 release of US seasonally adjusted nonfarm employment change and the unemployment rate on Wednesday (October 6), including Morgan Stanley (Morgan Stanley) 22 A large investment bank issued a preview of the data, as follows.



The forecasts of 22 large investment banks show that major investment banks have a large gap in the expected growth of non-agricultural employment population in September. Specifically, the US non-agricultural employment population growth rate after the September seasonal adjustment is expected to be between 250,000-700,000, and the unemployment rate is expected to be introduced. At 4.8%-5.3%, the average annual rate of hourly wage increase is expected to range from 4.5% to 4.7% .



Investors are waiting for the September non-agricultural employment report in the United States, which may help provide clues as to whether the Fed will begin to reduce the scale of asset purchases before the end of the year. John Doyle, vice president of transactions at Tempus, a foreign exchange payment company, said that non-agricultural employment data has always been a factor driving market trends. If the data does not perform well, it will provide dovish support to the Fed, but if the data has surprises, coupled with the increase in inflation due to the energy crisis, it will increase the pressure on the Fed to begin to reduce the scale of debt purchases and help the US dollar.

According to the US Federal Open Market Committee (FOMC) statement, the Fed will almost certainly announce a reduction plan in November. One unsatisfied reduction condition is that the improvement of the job market "makes substantial progress." This week's non-agricultural employment report will become a decisive data point. Economic research predicts that this week’s report will show that the number of non-agricultural employment has increased by more than 750,000. With more than 10 million job vacancies, even a small number of people receiving unemployment insurance re-enter the labor market, which may have a significant boost to employment data in September and the next few months.

JPMorgan Chase expects that the number of non-agricultural employment in the United States will increase by 575,000 in September, and the unemployment rate will drop to 5%. The factor driving the forecast higher than the consensus level is the expected rebound in employment in the leisure and hotel industries.

The economist of ING International Group believes that the main event this week is the September non-agricultural employment data in the United States and will finalize the Fed’s scheduled reduction of the balance sheet resolution. Raising interest rates will support the U.S. dollar. Technically, the U.S. dollar is about to usher in a major breakthrough, and the strong US non-agricultural report will consolidate this trend.

Bank of America strategists Ben Randol, Adarsh Sinha and Janice Xue believe that the market’s expectations for the Fed’s rate hike are still lagging behind the value in the 2024 dot plot. As long as this week’s US non-agricultural employment report “avoids substantial weakness”, it should pave the way for the reduction of the size from next month. Although downsizing and raising interest rates are still different aspects of the normalization of monetary policy, confirming the downsizing still reduces one reason for the foreign exchange market to doubt the Fed's determination. Rising inflationary pressures are also bound to push the central bank toward normalization of policy. The "buy on dips" mentality has boosted the stock market so far in 2021, but rising volatility and debt ceiling disputes may lead to further corrections in risky assets. Although risky markets Stabilization may trigger a further correction in the US dollar in the short term, but medium-term drivers still support the US dollar.