The latest Nonfarm payrolls data has surprised once again with a strong increase, which will raise the possibility of further tightening by the Federal Reserve this year and delay any rate cuts until 2024. This has caused futures to drop, while the US Dollar and Yields have surged. The positive jobs report also increases the likelihood of a Fed rate hike in November and highlights the importance of next week’s CPI inflation reports.
Upcoming events include speeches from FOMC Members Barr, Logan, and Jefferson, as well as BOE MPC Member Mann on Monday. On Tuesday, the Building Approvals data from Australia is expected to show growth of 7% after contracting by -8.1% last month. The FPC Meeting Minutes & Statement from the BOE will provide insights into the financial conditions and decisions made at their recent meeting. Wednesday’s highlights include the release of the German consumer price index, which is expected to remain unchanged for August but show a slowdown in headline inflation to 4.5% from 6.1%. The US Producer Price Index for September is also expected to increase, with a gain of 0.4% for the headline and 0.2% for the core.
On Thursday, we will see the release of the ECB Monetary Policy Meeting Accounts, which provides information on the rationale behind the policymakers’ decisions. The US Consumer Price Index for September is also expected to show gains of 0.2% for the headline and 0.3% for the core. Friday’s events include Chinese inflation and trade balance data for September, as well as speeches from BOE Governor Bailey, FOMC Member Harker, and ECB President Lagarde. The final Michigan sentiment report will also be released, revealing an upward revision to a headline drop of 68.1.
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