Weak Consumer Data, NFP Will Determine Market Direction
TD Securities' Global Strategy Team expects US Nonfarm Payrolls (NFP) to increase by only 45,000 in January, lower than the consensus of 70,000, with the unemployment rate remaining at 4.4%. They believe the risk is tilted more hawkish if unemployment falls to 4.3%, as the market would place greater weight on labor market “tightness” than on the headline payroll figure.
Ahead of the data release, the bond market had already moved: the 10-Year US Treasury yield hovered around 4.13% on February 11, 2026, reflecting a decline in yields following a string of weak US data. Meanwhile, the Dollar Index (DXY) also fell to around 96.56 (down ~0.25%) on Wednesday, reinforcing the dovish pricing tone ahead of the NFP.
TD also highlighted that weakening consumption increases the market's sensitivity to employment data. Stagnant US retail sales in December and contraction in the control group led them to cut their fourth-quarter GDP projections to 2.6% (q/q saar). This "consumer weakness" narrative has been the main driver of falling yields and the dollar in recent sessions.
The impact on safe-haven assets is clear: gold strengthened as the dollar and yields weakened ahead of the jobs data. Reuters noted that gold rose to the $5,074/oz area, supported by falling yields and a weakening dollar.
The bottom line: if the NFP figures approach TD's projection (45,000) and unemployment remains at 4.4% or rises, the market could more aggressively price in interest rate cuts—typically depressing the dollar/yield and supporting gold. But if unemployment falls to 4.3%, it could potentially trigger a hawkish response (dollar/yield rebound) even if the headline payrolls are modest—because the market will interpret the labor force as "tighter than expected." (alg)
Source: Newsmaker.id
