Key employment data for Meizuki is coming; can multi-asset markets hold steady?

Markets are gearing up for a new wave of volatility

The US employment report to be released on December 16 has become the focus of global investors’ attention. This report will disclose partial data for October NFP and the full data for November NFP at once. The market is not ignoring this—on the contrary, commodities, forex, and equities are already “digesting” the potential impact of this report.

Can the NFP data break market expectations?

Based on expectations, October NFP is forecasted to decrease by 10,000 jobs, but November is generally expected to see an increase of 130,000 jobs. This rebound looks impressive, but Citigroup economists have poured cold water on it—they believe this rise largely results from seasonal adjustments rather than a genuine improvement in labor market demand.

In other words, the market should be cautious about the true signals behind the data.

Federal Reserve rate cut expectations become the new focus

The latest dot plot from the Federal Reserve shows only one rate cut planned for 2026, but Wall Street traders are betting on a different story—they expect the Fed to cut rates twice next year, one more step than the official hint.

According to real-time data from CME FedWatch Tool, the market currently sets the window for the next Fed rate cut in April 2026, with about a 61% probability. This reflects traders’ “more optimistic” outlook on the US economy.

“Everything depends on employment figures”

Decision-makers at fixed income investment firms have openly stated that the main driver of interest rate trends is labor market performance, so Tuesday’s non-farm report carries significant weight. However, some analysts warn of signals—due to data collection complications caused by the government shutdown, the reference value of this week’s report may be limited. The real key point might only come when the US Bureau of Labor Statistics releases the December employment report on January 9.

Three market scenarios based on NFP data

Scenario 1: Employment data exceeds expectations

If non-farm employment growth surpasses market forecasts, it will reinforce the consensus that “the Fed will maintain high interest rates for the long term.” This expectation will:

• Strengthen the US dollar, attracting international capital inflows into US assets
• Be bearish for gold (a rising dollar depresses dollar-denominated commodities)
• Exert mild pressure on US stocks

Scenario 2: Weak employment data

Conversely, if non-farm data falls short of expectations, the market will increase bets on the Fed cutting rates further next year. This would lead to:

• A weaker US dollar
• Gold benefiting from dollar depreciation and rising
• US stocks potentially supported by liquidity stimulation

Scenario 3: Data meets expectations but signals are mixed

This is the most likely current market situation—data is generally in line, but the market still needs to interpret the Fed’s true intentions from the details.

Divergence among institutions: who is right about the next move of the dollar?

Morgan Stanley believes there is still room for the market to price in a deeper rate cut cycle, predicting the dollar will fall about 5% in the first half of 2026, implying further weakening potential.

However, Citibank holds a different view. They emphasize that the US economy remains resilient, continuously attracting global capital allocation, which will strongly support the dollar exchange rate. Citi even suggests that the dollar could enter a new appreciation cycle in 2026.

Conclusion

The December 16 employment report is undoubtedly an important benchmark for “market pricing.” Regardless of how the NFP data is interpreted, it will trigger a new round of reorganization in asset allocation among the dollar, US stocks, and gold. Investors should pay attention not only to the numbers themselves but also to the policy signals behind these figures from the Fed.