The non-farm data hides significant market turning signals. Those who understand it have already begun to take action. Don't wait until you miss out and regret it!
The latest released economic data from the United States for August has had a major impact on global markets: the unemployment rate is 4.2%, lower than the expected 4.3%; the non-farm employment population increased by 73,000, which is also slightly lower than the expected 75,000. Although these figures do not change much, keen individuals have already noticed that the market direction may change!
Why are these data so important?
A declining unemployment rate usually indicates that the economy is still growing, and policymakers are unlikely to loosen control easily. However, the non-farm data being slightly below expectations suggests that economic recovery is not stable. This contradictory combination of data is often a signal for a market turning point. What will be the Federal Reserve's policy direction next? The possibility of interest rate hikes may rise again, and the flow of funds may also change as a result.
Impact on our field:
Historical experience tells us that whenever non-farm data and unemployment rates show reverse changes, market volatility tends to increase significantly. After a similar situation occurred last month, the related market saw a single-day volatility exceeding 5%. This is not coincidental; it is a sign of funds readjusting direction.
More importantly, even a tiny difference of just 0.1 percentage points between expectations and actual values can trigger algorithmic trading and position adjustments by institutional investors, making the short-term market reaction non-negligible.
Chuan Ge's view:
In the short term, we need to be mindful of risks, but don't get left behind by market fluctuations. The data behind this reflects the game of economic strength and weakness, which may present a good opportunity for positioning in the medium to long term. Particularly, we should pay attention to whether there will be a large number of abnormal trading orders in the next couple of days, as this could be a precursor to significant market movements.
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