Non-Farm Payrolls were reported last Friday and despite slightly higher than expected numbers for June, the overall publication suggests that the US labour market is cooling off. The 206k new jobs surpassed consensus of just 190k, but the small excess was dwarfed by revisions to the April and May figures. Publications for the previous two months were revised down by a combined 111k jobs – a correction not uncommon for NFP data releases. The unemployment rate on the other hand ticked up to 4.1%, from just 4% previously.
The NFP data leans into the narrative that the Fed is approaching an economic situation that would allow it to lower interest rates. Many analysts were saying the same thing six months ago however, so any optimism surrounding monetary easing should be taken with a pip of salt. US indices took the news well, with the Nasdaq Composite in particular gaining 0.9% on Friday to achieve yet another record close. Gold ended the week on a positive note, gaining 1.5% on Friday to close at $2,391 an ounce. The DXY took a predictable hit, losing roughly a quarter of a percent on the day.
Currencies in general have been relatively muted recently, especially given that both the UK and France have just held elections. There may be more volatility in the Euro later today as markets digest yesterday’s results from France’s second round election. On the other hand, markets will have to contend with drama in the cryptocurrency sphere, with news that the Mt. Gox bankruptcy trustee has begun to repay bitcoin to creditors, a decade after the infamous hack occurred.
The economic calendar is looking particularly sparse early this week, with a couple of appearances from Fed Chair Jerome Powell tomorrow and Wednesday possibly breaking the mould. On Thursday, US CPI data will offer further insight into the world’s largest economy, but other than that, markets will not have much to get excited about this week.
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