Help
Markets muted ahead of the release of NFP data
Oil prices head for a weekly decline, Japan’s household spending sparks deflation fears and markets focus on the US labor market.
Japan’s household spending rose 0.1% in July, below the forecast of 1.2%.
Monthly spending decline of 1.7% complicates the Bank of Japan’s rate hike plans
Oil prices set for a weekly drop of 7-8%, despite lower U.S. crude inventories.
Japan’s spending
Government data released this morning showed that Japanese household spending in July rose less than anticipated, as consumers remained cautious about spending amid rising prices.
Consumer spending increased by just 0.1% year-on-year, falling short of the 1.2% growth forecast and on a seasonally adjusted, month-on-month basis, spending declined by 1.7%, compared to the projected 0.2% decrease.
This further complicates the Bank of Japan’s rate hike plan as personal consumption drops, sparking deflation fears in the midst of a rate hiking cycle. Private consumption, which makes up over half of Japan's economic output, has been a persistent weak point in the economy for the past year or so.
However, it saw its first increase in five quarters during the April-June period, sparking optimism for a potential consumer-driven recovery.
In Commodities
It has been one of the worst weeks for oil prices, with both benchmarks on track for a weekly decline of 7% to 8%.
Prices also shrugged off a drawdown in U.S. crude inventories and the postponement of production hikes by OPEC+ producers. Traders turned cautious ahead of the release of the non-farm payroll data. Brent was last seen near $72.57 while WTI crude hovered near $68.7
