US nonfarm payrolls missed forecasts by 103k, cooling Fed tightening expectations and weighing on the dollar.
Weaker-than-expected US labor data has pushed the dollar lower, reducing bets on a Federal Reserve rate hike in September. Nonfarm payrolls rose by just 23k in July, far below the 80k consensus, while prior months saw downward revisions.
The miss has lowered real-rate expectations, supporting risk assets and longer-duration bonds. Markets now price a less than 50% chance of a September hike, down from earlier projections.
Attention shifts to Wednesday’s CPI release, which will determine whether disinflationary trends persist or price pressures reaccelerate. A soft print could reinforce easing expectations, while an upside surprise may lift front-end yields.