The U.S. jobs data from Friday juxtaposed itself. On one hand, the last 18 months of heightened job creation and labour-market slowed; on the other hand, wage prices remained at a higher expected rate. Today, these rates show no indication of dropping, with the average hourly earnings sitting higher than the estimated on a monthly and annualised basis.
U.S. and Chinese CPI data: China’s exports slowing
Although the dollar has now recovered from a one-week low, the lack of job creation paired with wage gain and a seemingly decreased unemployment suggests that the Federal Reserve may keep interest rates higher for longer.
Chief Market Analyst at KCM Trade, Tim Waterer noted that the increase in hourly earnings is a stark reminder of further inflationary pressures. Waterer also suggested that a solid case for the rapidly receding rate of inflation will need to be pitched to the Federal Reserve in September if there is to be a pause in interest hikes.
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U.S. and Chinese inflation data is eagerly awaited due to its affect on the stock market’s recovery and gold prices. Chinese trade data for July 2023 suggests that the country’s exports suffered their biggest decrease in over 3 years. Measured in U.S. dollars, the value of Chinese exports fell 14.5% last month from the same year-over-year period, the biggest decline since the initial Covid-19 outbreak of February 202. Chinese CPI figures are due to be released tomorrow.
Tim Waterer Source: LinkedIn
Waterer observed:
With NFP now in the rearview mirror, inflation will be the focal point of markets this week. CPI and PPI readings from both the U.S. and China will take centre stage this week, but for differing reasons.
