In the past two days, the momentum of the 10-year US Treasury yield surge has temporarily paused. Whether it will continue to rise or turn around depends on tonight's non-farm payroll data.At 20:30 Beijing time on Friday, October 6th, the US Bureau of Labor Statistics will release data on changes in non-farm employment and the unemployment rate in September.According to a median survey by Bloomberg, economists generally expect that the growth of employment in the United States will continue to slow down:<ul><li>It is expected that the number of non-farm employment in September will increase by 170,000, lower than the 187,000 in August.</li><li>The unemployment rate is expected to slightly decrease from 3.8% in August to 3.7%.</li><li>Average hourly earnings will increase by 0.3% MoM, higher than the 0.2% in August; and increase by 4.3% YoY, maintaining a high level.</li><li>The labor force participation rate will remain unchanged at 62.8%.</li><li>The average weekly working hours will remain unchanged at 34.3 hours.</li></ul>The release of the September employment report comes at a critical moment for the market. Due to the rise in US Treasury yields and concerns about long-term high interest rates, the stock market has plummeted.Some Wall Street strategists believe that if tonight's non-farm payroll report remains strong, it may intensify the decline in the bond market, as it will highlight the resilience of the economy and push up yields. On the other hand, signs of weak data or &#34;very bad employment&#34; may help pull down US Treasury yields from their 16-year highs.Major investment banks still have huge differences in their forecasts for the number of new non-farm employees in September. Among the 22 large investment banks, including Morgan Stanley, the lowest forecast is 150,000, and the highest forecast is 240,000. There is also a large gap in the forecast for the unemployment rate, with the lowest forecast at 3.6% and the highest forecast at 3.9%. The expected values for the YoY growth rate of hourly wages are relatively close. The details are as follows:<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/6c93d380-b133-4e35-9239-5fa523cabc39.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/6c93d380-b133-4e35-9239-5fa523cabc39.png"/><h2>Other employment leading indicators show signs of labor market slowdown, but still resilient</h2>On Tuesday, the US Department of Labor reported that the number of job openings in August, as measured by JOLTS, increased by 700,000 MoM to 9.61 million, higher than the general expectation of 8.815 million. The revised previous value increased from 8.827 million to 8.92 million, highlighting the resilience of the labor market.On Wednesday, the ADP employment report, also known as &#34;mini non-farm,&#34; showed that the number of private sector jobs in the United States increased by only 89,000 after seasonal adjustment in September, the lowest since the beginning of 2021, and the slowdown far exceeded market expectations.After the release of the ADP data, CME's &#34;Fed Watch&#34; showed that the probability of the Fed maintaining interest rates in the range of 5.25%-5.50% in November was 81.3%, while the probability of a 25 basis point rate hike to the range of 5.50%-5.75% was 18.7%. The probability of the Fed maintaining interest rates in December was 64.3%, with a cumulative rate hike of 25 basis points at 31.8% and a cumulative rate hike of 50 basis points at 3.9%. Swap contracts also indicated a decrease in the likelihood of another rate hike by the Fed.The number of initial jobless claims in the US for last week, released on Thursday, was 207,000, an increase of 2,000 from the revised number of initial jobless claims in the previous week. However, it was 3,000 lower than market expectations and still remained near historic lows, reflecting the resilience of the labor market.In addition, the employment sub-index of the ISM manufacturing index in the US for September showed a significant jump, returning to the expansion zone for the first time since the May report was released. Meanwhile, the employment sub-index of the ISM services index decreased from 54.7 to 53.4, still in the expansion zone but with a slightly lower growth rate than in August.As of now, CME's &#34;Fed Watch&#34; shows that the probability of the Fed maintaining interest rates in November is 81.5%, while the probability of a 25 basis point rate hike is 18.5%.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/670fe0f3-aadd-47ba-a44c-8c94d961379c.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/670fe0f3-aadd-47ba-a44c-8c94d961379c.png"/><h2>Will strikes have a significant impact on September non-farm payrolls?</h2>In recent times, there have been waves of strikes by American workers. Previous analysis suggested that strikes could temporarily lead to negative job growth in the US and increase short-term price pressures.In August, strikes by workers and the bankruptcy of trucking giant Yellow resulted in a decrease of about 50,000 in non-farm payrolls.However, some analysts point out that in tonight's report, most investment banks do not believe that these factors will have an impact on the growth of September non-farm payrolls, as the Hollywood strike was still ongoing during the survey period, and the strike by the United Auto Workers only began after the survey week, so the impact on employment figures will not be seen until October.In fact, the end of two smaller strikes (by the United Auto Workers and 37,000 workers at the University of Michigan) will also moderately promote job growth.However, it is important to be cautious, as if strikes last longer than expected, the balance of the Fed's policy after September may lean towards another rate hike.<h2>Tonight's data may determine whether the Fed will raise rates in November</h2>With US inflation clearly declining, people are paying more and more attention to the labor market. The labor market has shown remarkable resilience in the face of Fed rate hikes.On September 20th, Fed Chairman Powell pointed out that the labor market still needs &#34;some softness&#34; to maintain inflation at the Fed's target of 2%. Powell warned that if this situation cannot be sustained, the Fed may raise rates again.Some analysts believe that the latest dot plot released by the Federal Reserve suggests that there will be one more interest rate hike this year, but the market is leaning towards this expectation, with only a 10 basis point increase expected by the end of the year. If the Federal Reserve decides to raise interest rates again, the question is whether it will be in November or December, but they may let the data make the decision.If the employment report is hotter than expected, the Federal Reserve and the market may lean towards a rate hike in November, but if the report is weaker, they may continue to pause the rate hikes.Nancy Vanden Houten, Chief U.S. Economist at Oxford Economics, wrote in a research report:&#34;We expect the September employment report to show a slight slowdown in job growth last month, but this is not enough to eliminate the risk of a rate hike at the Federal Open Market Committee (FOMC) meeting on November 1st.&#34;&#34;We do expect the labor market to weaken later this year as the impact of rising interest rates, tightening lending standards, and reduced consumer spending slows economic growth.&#34;Lydia Boussour, Senior Economist at Ernst &amp; Young, wrote in a research report on Tuesday:&#34;The slowdown in private sector job growth, the slowdown in wage growth, and the recent slowdown in core inflation should be enough to keep the Federal Reserve on hold in November, but policymakers may maintain a hawkish stance and reiterate their policy of maintaining rate hikes for a longer period of time.&#34;Some analysts also believe that the non-farm employment report is only part of what the Federal Reserve is concerned about. CPI and PCE price indices will also be released before the November meeting. With Powell's cautious approach, it is necessary for us to remain patient and wait for more data to be available in December for reassessment.

If tonight's non-farm payroll report remains strong, it may intensify the bond market's decline. However, signs of weak data or "very poor employment" could help pull down US bond yields from their 16-year high.

Will the 'anchor of global asset classes' continue to skyrocket or turn around? It all depends on tonight's non-farm payroll report.