Macro Outlook: The Fed is expected to be more cautious, and the non-farm payrolls report will affect market sentiment

According to Mars Finance news, the market showed an unusually cautious sentiment towards risk assets this week. The largest ETF tracking Bitcoin experienced the most severe capital outflow in history, US stocks recorded the worst year-end decline on record, and US Treasury volatility rose, indicating concerns about Trump's policies and their impact on inflation have awakened the hedge market. The non-farm employment report next week will play a core role in influencing market sentiment. The key points that the market will focus on in the coming week are as follows:

·Monday 22:30, speech by Federal Reserve Governor Lisa Cook;

·Tuesday 23:00, US December ISM non-manufacturing PMI, US November JOLTS job openings;

·Wednesday 21:15, US December ADP employment;

·Thursday 03:00, Federal Reserve releases minutes of December monetary policy meeting;

·Thursday 20:30, US December Challenger job cuts;

·Friday 21:30, US December unemployment rate, US December seasonally adjusted non-farm payrolls.

Next week, the US will release several labor market data, starting with the Jolts job openings data on Tuesday, followed by the ADP employment data on Wednesday, and finally the non-farm data on Friday. It is worth noting that the December non-farm data is the first report in several months that is not affected by one-time factors. UBS expects the US to add nearly the recent average number of jobs in December, continuing to show a gradual cooling of the labor market, providing room for the Federal Reserve to further cut interest rates. Given the current market pricing, strong labor data is unlikely to lead to further interest rate cuts by the Federal Reserve, while weak data may lead the market to consider further rate cuts. However, US data is unlikely to weaken the US dollar index at this stage.