Up, up, up, overnight, everything changed!

Global markets continued their rally on Friday, bringing back laughter: - Asia-Pacific stocks broadly rose, with South Korean stocks staging a major rebound, European stocks hitting new all-time highs first, and US stock futures edging up—funds are re-embracing risk assets; - Gold prices rose for the third consecutive day, closing at a two-week high; - The US dollar index edged down, still below the 101 level; - Oil prices rebounded slightly, with US crude below $70.

First, it is still the "dollar down, everything up" pattern, as the market is dumping the "rate hike fear" before the nonfarm payrolls. Currently, the probability of a Fed rate hike in September is about 45% (below 50%). The market has temporarily chosen the "sweet taste of weak nonfarm" rather than the "bitter taste of weak nonfarm". Funds are now more willing to trade, with the dollar weakening, rate hike probability falling, and global liquidity pressure easing. As for whether the cooling of employment means growth risk, let's put that off until next week.

Second, the sharp rebound in South Korean stocks is important for global markets, indicating that short-term forced liquidation and mechanical selling have not continued to spread—but this cannot yet be said to have resolved AI risks. It is just the first wave of deleveraging to stop the bleeding, bringing the market back from extreme panic to normal fluctuations. The bleeding has stopped, but the wound remains.

Third, what truly determines the next step is—whether CPI cooperates with the cooling nonfarm payrolls. If CPI also cools, the market will continue to trade "Fed no rate hike"; if CPI is hot, the market will fall back into the chaos of weak employment but hot inflation.

If CPI continues to cool, the market will think that weak nonfarm is not a bad thing, but rather a reason for the Fed not to hike. The dollar will continue to weaken, gold will remain strong, and global stocks will continue to benefit. If CPI is hot, the market will fall back into the most difficult combination to trade: employment weakens but inflation does not decline, i.e., "growth deteriorates, policy cannot ease". In this case, the dollar may rebound, US bond yields will rise again, and stocks will shift from the current repair rally to a stress test.

The market is not fully optimistic, but is using the dollar's decline to catch a breath.