US payrolls benchmark revision promises more excitement than usual – Commerzbank

There are two possible reasons for the rise in UST yields: 1) The supply of government bonds in Western countries has continued to rise in recent years, causing yields to rise. 2) The market expects the Fed to cut interest rates, thereby fuelling inflationary pressure and forcing it to raise interest rates again in the coming years, Commerzbank's FX analyst Michael Pfister notes.

USD might suffer from the NFP revision today

"Point 2 is clearly illustrated by the fact that we have experienced considerable volatility over the last 12 months. At the end of September, the US dollar appreciated in line with rising Fed interest rate expectations, only to move in the opposite direction shortly after the turn of the year. Admittedly, the relationship between Fed expectations and the US dollar has not been quite as close in recent weeks as in previous years. One might well ask, though, what we have actually been doing over the past 12 months if we are now back almost at the same point as last September."

"Expectations of a Fed interest rate cut may be fuelled today by the revision of the benchmark payroll figures. The Bloomberg consensus assumes that 700,000 fewer jobs were created in the labour market than originally thought. This is despite the figures already having been revised downwards recently, which led to the dismissal of the head of the statistics authority."

"Accordingly, many market participants are likely to pay close attention to this figure today, especially as it is difficult to predict and could therefore hold a surprise for us. If (even) fewer jobs were created than expected, interest rate cut expectations are likely to increase. The US dollar would suffer accordingly."