Non-farm payroll data will be released tonight! Will the Fed's rate cut expectations change again?

Recently, the Iran war outbreak has driven up international oil prices, reigniting fears of US inflation. US Treasury yields have risen, and market confidence in a rate cut by the Federal Reserve this year has significantly decreased. On Friday, US local time, the February non-farm payroll data will be announced, providing a key guide for the Fed's rate cut decisions.

Morgan Stanley Chief Economist Xing Zhiqiang analyzed that US core inflation data still depends on service sector consumption and wage levels. In the short term, the unclear situation in Iran and the closure of shipping routes have caused panic buying of international crude oil prices, indirectly leading to a second rise in US CPI inflation expectations. However, due to storage buffers in the US and other oil-producing countries, the impact is controllable. The expectation of a Fed rate cut may temporarily retreat, but the overall trend remains unchanged.

If expectations for a Fed rate cut increase, it could be positive for liquidity-sensitive assets in emerging markets!