Markets In-Review: Markets Digest The Non-farm Payrolls

■ Fed's Lockhart seems committed for September rate hike

■ U.S. rate markets increase amid Lockhart comments

■ Nonfarm payrolls slightly misses target with limited impact on markets

■ U.S. stock markets conclude week in the red; S&P500 down 1.25%

■ Oil freefall continues with 6.9% weekly decline

Stock markets concluded the week with a somewhat negative note, amid the release of the highly expected U.S. non-farm payrolls data. The S&P 500 (SPY) lost 0.3% on Friday, the Dow Jones (DIA) recorded similarly negative performance for the day and the Nasdaq (QQQ) saw an even larger 0.8% decrease. U.S. 2 year government bond yields added a few basis points upon the release of the print, concluding the day close to 0.72%. The nonfarm data in itself was far from staggering, the gain in the U.S. job market was quite close to analyst consensus at 215K, vs.an analyst consensus of 225K and a June figure of 223K. Similarly, Unemployment remained at its 7 year low of 5.3%.

Allegedly, one should have expected the decrease in the nonfarm payrolls to convince the markets that the long-expected Fed rate hike should now come later down the line, thus aiding equity. The Fed, however, seems to have beat markets to the matter, when, on Tuesday, Atlanta Fed president Dennis Lockhart downplayed the significance of occasional blips in the macro data, compared with the Fed's commitment for an upcoming rate hike. Lockhart stressed that he sees a "high bar" necessary right now for the Fed not to take action in September. He further added that "we're getting positive signals from the employment market." It should be further noted that Lockhart's comments, alone, had a rather noteworthy impact on the markets. Namely, they’ve led to the USD adding about 0.7% vs. the EUR and the yield of the U.S. 2 year government bond increasing about 0.04%.

Fed determined to raise rates

On a weekly perspective, the evident Fed determination has helped increase market expectations for a Fed rate hike in September