This week, there are several key macroeconomic data points that need to be closely monitored, with the core focus undoubtedly being the non-farm payroll report on Tuesday evening.
First, let's discuss the data itself. The unemployment rate for September is 4.4%, with non-farm employment increasing by 119,000. However, this time the released data is somewhat special—the unemployment rate and non-farm data for October are missing.
Why is that? The reason is the rare government shutdown event in U.S. history. The U.S. Bureau of Labor Statistics was unable to collect household survey data (which is the basis for calculating the unemployment rate) during the shutdown, resulting in the inability to gather data for October. What’s more troublesome is that these data cannot be collected later. Therefore, the Bureau's final decision was to merge the originally planned separate release of the October non-farm report into the November data release.
In other words, the non-farm data and unemployment rate released tomorrow actually combine data from both October and November. This does indeed increase the volatility and points of interest in the data.
From the market outlook, considering the Federal Reserve's meeting stance on December 9 and Chairman Powell's remarks on the labor market, the probability of positive non-farm data is quite high. If the data indeed exceeds expectations favorably, coupled with the Federal Reserve's technical balance sheet expansion of $40 billion per month—though strictly speaking, this isn’t considered quantitative easing, it will certainly increase market liquidity—this would have a noticeable supportive effect on the stock market and crypto space.
From historical experience, whenever liquidity increases and employment data improves, risk assets often experience a surge. The combination of factors this time seems rather favorable for risk assets.
Whether November's new employment can exceed 150,000 is a key indicator to watch, although the probability is very low, if it does happen, the stimulative effect on the market would be stronger. In summary, tomorrow's data release is worth close tracking. A big wave is coming, so keep up and hold tight
