Last night, the fear of an interest rate hike was dispelled.

Source: Wall Street Intelligence Circle

The weak nonfarm payroll report dispelled fears of an interest rate hike, but did not ignite an overall risk-on sentiment.

The global markets’ performance on Thursday can be summarized in four words: “The shock isn’t over.”

- The US Dollar Index saw its largest single-day drop in two months, with the strong dollar trade temporarily interrupted;

- Gold strongly reclaimed $4,100, emerging as the strongest signal in the market;

- The 10-year US Treasury yield closed at 4.47%, but the reaction was not extreme;

- US equities saw wild swings, ending with mixed results. The Dow Jones hit a record high, while the Nasdaq fell.

This major shock occurred not just in prices, but also in the market’s mindset: the same set of weak employment data was first interpreted as favorable for rates (the odds of a Federal Reserve rate hike in September dropped from 64.1% to 55.1%), then as a warning sign for growth—the market no longer automatically treats “weak data” as good news.

Friday looks more like a “global market digestion day” rather than a day for new direction-setting.

US markets will be closed on Friday, but overseas markets will continue trading, reflecting the “strong Dow, weak Nasdaq” divergence.

The US dollar is unlikely to rebound immediately. This time, nonfarm payrolls were only 57,000, significantly below market expectations, directly halting rate-hike bets for July.

Gold remains strong, but may not continue to surge. With the US market closed and liquidity scarce, momentum-chasing capital may act cautiously.

Friday will not provide the final answer. With the US core markets closed, major capital flows cannot fully express their views. Friday will be more about overseas markets, commodities, forex, and cryptocurrencies digesting Thursday’s nonfarm data.

The real key will be next Monday. The question the market must answer is: Is the weak nonfarm report “good news signaling an end to rate hikes,” or “bad news indicating that growth is starting to weaken”?