USD: Employment data to shape Fed's next move – TD Securities

The Global Strategy Team at TD Securities highlights that upcoming employment data will be critical in determining the timing of the Federal Reserve's next rate cut. Key reports include JOLTS on Tuesday, ADP on Wednesday, and the NFP/unemployment numbers on Friday. The market is currently pricing in a more dovish Fed following the nomination of Kevin Warsh as the next Fed chair.

Focus on upcoming employment data

"This week, will get the monthly slate of employment data. The highlights will be JOLTS on Tuesday, ADP on Wednesday, and the NFP/unemployment numbers on Friday. Those should be critical in determining when the Fed's next rate cut might come."

"President Trump announced that he will nominate Kevin Warsh as the next Fed chair, which led to a twist steepening of the Treasury curve. The late-2026/early-2027 forwards were impacted the most as markets priced in the odds of a more dovish Fed, while longer-dated yields rose due to a combination of lower perceived Fed credibility and Kevin Warsh's historical opposition to using the Fed's balance sheet."

"Despite the new Fed chair nomination and the PPI, which surprised to the upside, rates markets were fairly anchored relative to other cross market movers."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)