Friday, June 3, 2016

Gold jumps $30 while dollar drops 100 bps as jobs report kills any chance of June rate hike

So much for the Fed sending out President after President last month to jawbone the central bank assuredly raising interest rates this month.  That is because on June 3 the newest jobs report came out, and it was perhaps the biggest blow to the long-standing meme that the economy was in total recovery.

In fact, the economy only created 38,000 jobs, which is the lowest number since September of 2010, and the smallest print since the height of the Great Recession.  But perhaps what is most chilling in all of this is that the report noted that 548,000 Americans simply vanished from the labor force, meaning they not only are out of work, but are also no longer counted by the government.

The worst jobs data since September 2010 has thrown ice cold water on The Fed's decision-making process and thrown a spanner in the market's narrative that everything is awesome. June rate hike odds crashed to 2% and July rate-hike odds plunged from 48% to 36%. The reaction to this sudden revelation of reality is striking as stocks plunge, gold soars, the US Dollar dumps and bond yields spike lower... - Zerohedge
In the meantime gold popped up $30 from the release of the jobs numbers and the dollar collapsed more than 100 bps now that the expectation of a rate hike for June has gone through the floor.


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