Sunset Market Commentary

On currency markets, the dollar’s rally went in reverse. We saw some signs of fatigue already yesterday, with the greenback unable to profit from minor risk off and USTs underperforming.

US Inflation Report Coming Up as Dollar Storms Higher

The spike in US yields this week gave the dollar a boost, but the longevity of this recovery will be decided by the next edition of US inflation. According to the Cleveland Fed Nowcast model, there is some scope for an upside inflation surprise, which would be a blessing for the dollar. Aside from this release, there isn’t much else that can disturb the waters next week. 

Weekly Economic & Financial Commentary: First Glimpse Points to July Activity Remaining Firm

Following last week's data, which brought some encouraging updates showing ongoing strong growth and easing inflation, this week continued with the first look at key July indicators, including more evidence that the labor market continues to gradually cool.

Weaker than Expected NFP

Overall, the US labour market report was slightly weaker than expected. The non-farm payrolls came in at 187k (consensus: 200k, prior: 209k), while private payrolls were at 172k (consensus: 180k, prior: 149k). Unemployment rate ticked lower at 3.5%.

Forex and Cryptocurrencies Forecast

The NFP is a key barometer of potential cooling in the US economy. A decline in NFP suggests that the 'screws' have been tightened too much, the economy is stagnating, and perhaps further tightening of monetary policy needs to be paused. At the very least. Or maybe it's time to end the cycle of monetary restriction altogether. This logic drove the DXY down and pushed EUR/USD up. As a result, the pair ended the five-day period at a mark of 1.1008.

Australian Dollar Calm After Rough Week

The Australian dollar is coming off another rough week, with losses of 1.17%. The currency has looked dreadful, losing close to 300 points since July 17th. In Monday’s European session, AUD/USD is trading at  0.6556, down 0.20%.

Week Ahead – NFP Report to Probably Steal the Limelight from BoE and RBA

The Bank of England and Reserve Bank of Australia will wrap up the summer central bank decisions in the coming week, although the US jobs report may attract the most attention. The ISM PMIs will be the other highlights in the United States, while employment numbers are due in Canada and New Zealand too. Over in Europe, the agenda will be dominated by flash inflation and GDP data. Oil will also be in the spotlight as the OPEC+ alliance holds its monthly meeting.

All Eyes on Jobs Report Amid Booming Canadian Population Growth

Fresh labour market data for Canada and the U.S. lands next week. And both Bank of Canada Governor Tiff Macklem and U.S. Fed Chair Jerome Powell will be on the lookout for signs that higher interest rates are cooling things down.

The Weekly Bottom Line: Preparing for Landing

Fed Chair Powell signaled a meeting-by-meeting approach on changes to the fed funds rate, opting to evaluate incoming data and fine-tune interest rates to help temper inflation.

Weekly Economic & Financial Commentary: Fed Hikes and Keeps Its Options Open

The Federal Open Market Committee hiked the federal funds rate by 25 bps at its July monetary policy meeting. The post-meeting communication was little changed from June as the committee keeps its options open regarding additional tightening.