U.S. employment data in August was significantly stronger than expected, prompting the market to re-evaluate the path for the Federal Reserve's September meeting. As a result, U.S. Treasury yields rose, the dollar strengthened, gold fell, and Bitcoin also turned from gains to losses after the data release, once again falling below the $80,000 mark.

Non-farm payroll higher than expected

Data released by the U.S. Bureau of Labor Statistics shows that non-farm employment increased by 162,000 in August, far exceeding the 56,000 expected by economists in a Reuters survey; the unemployment rate remained at 4.1%.

The data for the previous two months was also revised upward; in June, the number of new jobs created was corrected from 20,000 to 31,000, and in July, it was corrected from a decrease of 23,000 to an increase of 21,000. Over the two months, the total number of new jobs exceeded the initial estimate by 55,000.

Looking at the details, the catering service industry added 59,000 new employees, local government education added 42,000 new employees, and manufacturing increased by 16,000; however, the information industry saw a decrease of 23,000 employees. The average hourly wage increased by 0.3% month-on-month and by 3.1% year-on-year, with the average weekly working hours rising to 34.4 hours.

Trump exerts further pressure on the Federal Reserve

After the data was released, Trump once again publicly called for interest rate cuts, stating that the United States' credit situation was stronger than before and that it should have "the lowest interest rates in the world." He also linked the issue of interest rates to the trade agenda, indicating that if the Federal Reserve did not cut interest rates, the United States would stop trading with countries that have a trade surplus with the US.

However, the Federal Reserve's interest rate decisions are made independently by the Federal Open Market Committee, with employment and inflation still being the key considerations, rather than direct requests from the White House. The report mentions that Trump did not specify which countries the trade threats would be directed at, nor did he provide a timeline or method for enforcing the laws.

Bitcoin surges higher before pulling back

Bitcoin once rose to around $82,262 during trading on Friday, but after the release of the non-farm payroll data, it quickly lost its gains, with the price falling from around $81,600 to around $79,800 in a short period of time, a decline of over $2,000.

This decline occurred after Bitcoin's significant rise in August. The report mentioned that BTC had a cumulative increase of about 25% in August, and US spot Bitcoin ETF recorded net inflows on 16 out of 21 trading days, attracting a total of $3.52 billion.

CoinGlass Data shows that within 4 hours before and after the release of employment data, approximately $251 million in leveraged positions were liquidated in the crypto market, of which long positions were liquidated for about $216 million, and short positions for about $35.14 million.

September interest rate hike expectations are heating up

Reuters, citing interest rate futures data, reported that after the release of the non-farm payroll figures, the market's pricing probability for a Fed interest rate hike at its September meeting rose to around 59% to 61%, up from 52% before the data was released. Meanwhile, the yield on 2-year U.S. Treasury bonds rose to 4.38%, the yield on 10-year U.S. Treasury bonds rose to 4.776%, the U.S. dollar index gained, and gold prices fell by 1.2%.

Market participants believe that strong employment trends may reinforce the trading logic that "good news is actually bad news." If the labor market remains close to full employment, the Federal Reserve will pay more attention to inflation, and the urgency for interest rate cuts will decrease, which could put pressure on risk assets that have seen a recent rebound.

Additional information:In the United States, on August PPI, the results will be announced on September 10th, and on CPI, they will be announced on September 11th. The Federal Reserve will hold its interest rate meeting from September 15th to 16th and will announce the interest rate decisions on the 16th.