Traders Bet Aggressively On Rate Cuts Ahead Of Jobs Data: 5 ETFs To Watch This Week

Investors anticipate the release of critical labor market data between Wednesday and Friday, heightening their expectations for aggressive rate cuts by the Federal Reserve.

Expectations for a 50-basis-point rate cut at the Sept. 18 Federal Open Market Committee (FOMC) meeting slightly increased during Tuesday’s trading, as manufacturing surveys revealed further contraction in activity for August.

Market-implied probabilities for a half-percentage-point rate cut this month rose to 37%, up from 30% last Friday, according to data from CME FedWatch.

Market participants are factoring in approximately 90 basis points, or nearly a full percentage point, of rate cuts across the next three FOMC meetings by December 2024.

Labor Market Data to Watch This Week

A significant wave of economic data will offer traders critical insights on the state of the labor market:

Wednesday: Job openings and quits for July, a month that saw a cooling employment landscape. Economists predict a slight decrease in job vacancies from 8.18 million to 8.10 million.

Thursday: At 8:15 a.m., the ADP will release private payroll data for August, with expectations for job ...