Stephen Innes
SPI Asset Management
The toasty jobs number leaves the macro picture primarily intact.
Critics of the "soft landing" narrative may argue that the jobless rate is still "too low" to align with price stability. However, it's essential to note that pessimistic views tend to fluctuate based on incoming data. Earlier in the week, when the JOLTS report revealed a significant drop in job openings and ADP figures fell short, pessimists warned of a potential spike in the unemployment rate. Interestingly, some of these same critics have shifted their stance, suggesting that unemployment isn't high enough.
From a broader perspective, there are worse things than having a robust reading on job creation, especially when there is an expectation that inflation is still on course to moderate further. While Friday's labour market update was above consensus, no alarm bells were ringing to send the market scurrying for cover as it is unlikely officials will be overly concerned about the limited progress towards a 4 % unemployment rate, especially if the Consumer Price Index (CPI) doesn't overshoot expectations on Tuesday.
The current Fed policy stance is less urgent, given that core inflation is coming down the mountain quickly, and commodity price pressures remain subdued. With benign inflation dynamics, equities have some breathing room to wether minimal beats on jobs data.
SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.
Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.
Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.