Today's Update 03-07-2025
Key Points and Metrics
Key Points and Metrics
U.S. Employment Data
Nonfarm Payrolls: 151k (Forecast: 160k, Previous: 143k, Revised: 125k)
Unemployment Rate: 4.1% (Forecast: 4.0%, Previous: 4.0%)
Average Earnings YoY: 4.0% (Forecast: 4.1%, Previous: 4.1%)
Average Earnings MoM: 0.3% (Forecast: 0.3%, Previous: 0.5%)
Private Payrolls: 140k (Forecast: 147k, Previous: 111k)
Manufacturing Payrolls: 10k (Forecast: 2k, Previous: 3k)
Labor Force Participation: 62.4% (Forecast: 62.6%, Previous: 62.6%)
Canadian Employment Data
Employment Change: 1.1k (Forecast: 20k, Previous: 76.0k)
Unemployment Rate: 6.6% (Forecast: 6.7%, Previous: 6.6%)
Average Hourly Earnings YoY: 4.0% (Forecast: 3.72%, Previous: 3.70%)
Participation Rate: 65.3% (Previous: 65.5%)
Capacity Utilization: 79.8% (Forecast: 79.3%, Previous: 79.3%)
Market Reactions
S&P 500: Initially strengthened, then weakened after jobs report
US Dollar: Initially weakened, then strengthened
Bitcoin: Fell as details about US strategic reserve disappointed investors
Bond Yields: Declined following jobs report
Rate Expectations: Traders now betting Fed to wait until June for rate cuts
Fed Easing: Still expecting about 75 basis points of cuts this year
Canadian Rate Cut Odds: 74% chance of BoC cut on March 12, up from 71% before jobs data
Trade & Geopolitical Developments
Trump's Executive Order: Reduced duty rate for non-USMCA-compliant potash to 10% from 25%
Mexico-US Relations: Economy Minister Ebrard to meet USTR representatives next week
US-India Trade: Commerce Secretary Lutnick pushing for broader trade deal with India
US-China Relations: Treasury Secretary Bessent says Trump wants "fair trading" with China
Trump on South Africa: Announced stopping federal funding, invited South African farmers to US
Russia-UK Tensions: Russia considering confiscating British property in response to asset transfers to Ukraine
Corporate News
Microsoft: Testing AI models from XAI, Meta, and DeepSeek as potential OpenAI replacements
Microsoft: Developing in-house AI reasoning model to compete with OpenAI
Nasdaq: Joining exchanges seeking to offer round-the-clock trading
Energy & Commodities
US Energy Plans: Energy Chief plans to seek $20 billion to refill oil reserve
Iran-US Relations: Trump has written letter to Iran, prefers deal over weapons
Gaza Ceasefire: Hamas delegation in Cairo to discuss agreement
Final Thoughts
The February jobs report reveals a labor market that's cooling but not collapsing. With U.S. nonfarm payrolls coming in below expectations at 151k and unemployment ticking up to 4.1%, we're seeing signs of moderation that could influence the Federal Reserve's rate decision timeline. Traders have already pushed back expectations for the first rate cut from May to June, though they still anticipate about 75 basis points of easing this year.
Canada's employment situation shows more dramatic cooling, with job creation nearly stalling at just 1.1k versus the expected 20k. This has increased the likelihood of a Bank of Canada rate cut next week to 74%.
Market reactions have been mixed and volatile, with initial strengthening in equities giving way to weakness as investors digest the implications of the employment data. The dollar followed an opposite pattern, first weakening then strengthening.
On the geopolitical front, trade relations remain in focus with the Trump administration actively pursuing negotiations with multiple countries. The reduction in tariffs for certain Canadian and Mexican goods signals some flexibility in the administration's approach, while continued pressure on China and new initiatives with India show a broad strategy to reshape global trade relationships.
Microsoft's moves to test alternative AI models and develop its own reasoning capabilities highlight growing competition in the AI sector and potential concerns about reliance on OpenAI. Meanwhile, Nasdaq's push toward 24-hour trading reflects the ongoing evolution of global markets toward continuous operation.
The confluence of moderating economic data, evolving monetary policy expectations, and significant geopolitical and technological developments creates a complex landscape for investors to navigate in the coming weeks.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.
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Harry