Jobless claims ease recession concerns

US initial jobless claims drop

US initial jobless claims dropped by 17,000 to 233,000 for the week ending August 3, below the expected 245,000. The four-week moving average of initial claims, however, edged up by 2,500 to 241,000.

Continuing claims rose by 6,000 to 1.875 million for the week ending July 27, marking the highest level since November 21, 2021. The four-week moving average of continuing claims increased by 7,000 to 1.869 million, the highest since November 27, 2021.

RBA's Bullock hints at future rate hikes if necessary

RBA Governor Michele Bullock disclosed that the board "explicitly considered" a rate hike during their latest meeting. Although they decided to hold rates steady, Bullock emphasized that the RBA "will not hesitate" to hike if necessary. The decision was influenced by two factors: persistent inflation due to a larger-than-expected gap between aggregate demand and supply, and the expectation of demand growth picking up over the next year, despite significant uncertainties.

BoC minutes indicate consensus for rate Cuts

The Bank of Canada's Summary of Deliberations from its July meeting showed a "clear consensus" on the need for additional rate cuts if inflation continues to ease. Members agreed that with inflation "closer to target" and "downside risks" becoming more prominent, it would be appropriate to "lower the policy rate further" if inflation follows the projected path.

BoJ member advocates gradual rate hike

The Bank of Japan's Summary of Opinions from the July 30-31 meeting revealed discussions on further rate hikes. One member suggested that, assuming the price stability target is met by the second half of fiscal 2025, the BoJ should raise the policy interest rate to at least around the 1% neutral rate. The member advocated for a "timely and gradual" approach to avoid rapid hikes.