Better-than-expected non-farm payrolls dampened expectations of interest rate cuts; strong US economy supported risk sentiment.

According to ME News, on February 12 (UTC+8), a surprisingly strong surge in US non-farm payrolls weighed on the US Treasury market, with traders reducing their bets on a Federal Reserve rate cut this year. Short-term Treasury bonds were hit hardest, with the two-year Treasury yield rising 6 basis points to around 3.51%. The money market now expects the next Fed rate cut to occur in July, rather than the previously anticipated June. Asian stock index futures diverged after US stocks closed flat. Futures indicated a rise in Japanese stocks after Thursday's holiday, while the Australian benchmark stock index contract fell. This volatility suggests that the current strength of the US economy is offsetting market desire for lower borrowing costs, supporting risk sentiment. Bret Kenwell of eToro said investors should welcome the US jobs report, even if it gives the Fed more room to keep interest rates unchanged. He noted, "If the labor market does stabilize, that will be constructive for both the economy and the markets." (Source: ME)