July non-farm payrolls fell 23K, missing estimates and revising prior months lower, triggering a sharp drop in USD and Fed rate hike odds.
US non-farm payrolls contracted by 23K jobs in July, shocking markets and undershooting the 80K gain expected. The report also revised the prior two months down by a combined 103K jobs, dragging the three-month average to just 20K jobs.
Expectations for a September Fed rate hike plummeted from 57% to 44% following the release. The weak data sparked a broad sell-off in the US dollar, with USD/JPY dropping 127 pips to 157.14 and USD/CAD falling 65 pips to 1.3948.
Gold surged $122 to $4360, while S&P 500 futures extended gains, up 41 points. US 2-year yields fell 6.8 bps to 4.17%, easing pressure on bonds.