Strong US jobs data complicates any Warsh push for lower rates
A second straight strong US payrolls print is complicating any push by Kevin Warsh, Donald Trump's reported pick to lead the Federal Reserve, to argue for lower rates. Asian bond investors are already revising their dollar and emerging-market currency calendars.
Asian bond desks reopened by reworking their pricing for the Federal Reserve's September meeting after a second consecutive US payrolls print beat expectations. Headline non-farm payrolls came in above forecast and average hourly earnings stayed above 4.0 percent year on year, leaving the labour market visibly resilient.
The data complicates the operational case for Kevin Warsh, the former Fed governor reported to be Donald Trump's leading candidate to chair the central bank, to argue for early rate cuts. Markets had been positioned for Warsh to set up 50 to 75 basis points of easing by year-end; the back-to-back jobs surprises now push the likely pivot into December at the earliest.
For Asian investors, that means the dollar can stay firm against the yuan and the yen in the near term. Strategy notes in Singapore, Seoul and Hong Kong flag upside pressure on emerging-Asia bond yields and a possible technical pullback in export-sensitive currencies until the next inflation print clarifies the trajectory.
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