Jobs Shock Spurs Fed-Cut Bets

U.S. job growth was revised sharply lower, sharpening recession risk and bolstering odds of near-term Fed cuts. Asia rallied into today’s PPI with ECB and U.S. CPI looming tomorrow.

TL;DR:

• 🧮 Jobs revised down nearly 1 million
• 📈 Asia stocks rally on cut hopes
• 🧾 U.S. PPI due today
• 🏦 ECB and U.S. CPI tomorrow

Jobs Revised Down Nearly 1 Million

Yesterday’s shock BLS revision showed U.S. job growth was nearly one million lower than previously reported, intensifying concerns about slowing momentum and fueling talk of larger or earlier Fed cuts. The downgrade sharpened a “softness-with-inflation” narrative that keeps stagflation risk on the radar ahead of key prints. Markets leaned dovish on rates and stayed data-dependent into midweek catalysts. Source Source

Asia Stocks Rally on Cut Hopes

Overnight, Asian equities advanced while core bond markets softened as traders priced higher odds of a bigger near-term Fed cut. Tech and cyclicals led gains, with risk appetite improving despite lingering growth worries. The move underscores a “bad news is good news” dynamic that persists into the U.S. inflation run-up. Source

U.S. PPI Due Today

Today’s Producer Price Index is the first inflation checkpoint of the week and a potential volatility trigger for front-end rates and dollar crosses. Core PPI components that feed into services and goods pipelines will set the tone for CPI expectations and risk positioning into tomorrow. Traders are watching for any upside surprise that could blunt aggressive cut pricing. Source

ECB and U.S. CPI Tomorrow

Volatility risk climbs into Thursday with the ECB rate decision and the U.S. CPI print arriving within hours of each other. A firm CPI could challenge dovish Fed bets, while the ECB’s tone on growth versus inflation will steer EUR crosses and European rate curves. Cross-asset hedging is elevated into these twin catalysts. Source Source