Attention: The U.S. and Japanese Markets' Trading Hours are Changed, While the Probability of a Rate Cut is Near 100%

This week, there are a series of important events happening in global markets. The first one is the Federal Reserve interest rate meeting. The second thing is the U.S. presidential election. The competition between Trump and Harris is almost stalemate. It is hard to tell whether one of them will be the winner. Wall Street warned that the controversial election could be followed by “a few weeks of very confusing legal disputes “ that the market has not yet priced in, which would disrupt the market.

 

 

Additionally, on November 4 (Monday), because the U.S. enters the winter time, trading hours of its market are delayed by 1 hour. Likewise, the U.S. CPI, non-farm payrolls, and other important economic data will be published 1 hour later than the daylight saving time. Trading hours of the U.S. market are adjusted as follows:

 

 

 

 

Non-farm payrolls data the U.S. previously released show that the non-farm payrolls in October increased by 12,000 people, an expected increase of 113,000 people. The figure was revised from the previous value of 254,000 people to 223,000 people. The U.S. unemployment rate in October was 4.1%. The expected data was 4.1%. And, the previous figure was 4.1%. The U.S. Bureau of Labor Statistics announced that Hurricane Milton happened during the reference period of the household survey (unemployment rate) and corporation survey (nonfarm payrolls), so the October household survey response rate was within the normal range, while the October corporation survey collection rate was below average. Employment estimates for some industries were likely affected by the hurricane. However, it is impossible to quantify the impact of the hurricanes on nonfarm payrolls, average hourly earnings, and other data.

 

 

In addition, total nonfarm payroll employment for August was revised downward by 81,000 from 159,000 to 78,000; total nonfarm payroll employment for September was revised downward by 31,000 from 254,000 to 223,000. With these revisions, the August and September employment numbers combined were 112,000 less than previously reported.

 

Responding to October's jobs data, President Joe Biden said that hurricanes and strike activity slowed job growth. He argued that job growth is expected to rebound in November, adding that there was more work to be done.

 

According to the CME “Fed Watch”, the probability that the Fed will cut 25 basis points in November is 99.7%. The likelihood of keeping the current rate unchanged is 0%. The possibility of a 50 basis point cut is 0.3%. The probability of keeping current rates unchanged through December is 0%. The likelihood of a cumulative 25 basis point cut is 19.5%. The possibility of a cumulative 50 basis point cut is 80.3%.

 

The latest probability has increased compared to the probability before the nonfarm payrolls announcement. Before this, the probability of the Fed cutting 25 basis points in November was 93.1%. The possibility of keeping current rates unchanged was 6.9%. The likelihood of keeping current rates unchanged through December was 5.2% and the cumulative probability of a 25 basis point cut was 94.8%.

 

 

In addition, to improve the transparency of the formation of the closing price, the TSE will introduce the “closing bidding” system, that is, within five minutes before the end of trading, only orders to determine the closing price are accepted. Not long ago, the New York Stock Exchange also announced plans to extend trading hours. It planned to extend its all-electronic exchange NYSE Arca's stock trading hours to 22 hours per business day, pending regulatory approval for implementation.