Help
U.S. labor market strength eases market caution
Officials Barkin and Goolsbee addressed the Fed's careful stance on economic data and potential policy changes, highlighting concerns about possible over-tightening.
Germany's inflation remained steady in July
China's MoM inflation rose by 0.5% in July, surpassing forecasts, but YoY figures showed a decline
Brent Crude Oil recovered to above $79 per barrel
Asian Markets
Chinese Inflation: China's inflation data exceeded expectations, providing a boost to the markets. The MoM inflation rate rose by 0.5% in July, surpassing the expected 0.3% increase. However, the YoY figure showed a -0.8% decline, slightly better than the anticipated -0.9%.
Despite the positive surprise, Mainland Chinese markets declined, as investors viewed the inflation uptick as largely driven by temporary, seasonal factors rather than a sustainable trend.
European Markets
German Inflation Data: The final German inflation figures for July aligned with expectations. The Consumer Price Index (CPI) remained steady at 2.3% year-on-year (YoY), with a month-on-month (MoM) increase of 0.3%. Similarly, the Harmonized Index of Consumer Prices (HICP) also met forecasts, recording a 2.6% YoY rise and a 0.5% MoM increase.
Norwegian Inflation: Norway's CPI showed a slight deviation from expectations. The July YoY CPI was reported at 2.8%, slightly below the forecast of 2.9%, but higher than June’s 2.6%. The MoM increase was in line with expectations at 0.5%.
U.S. Markets
Strong U.S. labor market data boosted market sentiment, particularly supported by semiconductor sector. Despite the previous day's strong performance, futures retreated slightly today.
The EUR/USD is trading at 1.092, and USD/JPY witnessed some correction during the Asian session but went back to trading above 147.
Commodities
Oil: Brent Crude Oil climbed above $79 per barrel, marking an 8% recovery from Monday's low. Meanwhile, West Texas Intermediate (WTI) crude oil edged up to $75.10, supported by falling U.S. crude inventories and robust labor market data.
Gold: Gold prices struggled to maintain momentum, trading around the $2,418-$2,417 range. The upbeat U.S. labor market report and stronger Chinese inflation figures dampened demand for the safe-haven asset, though geopolitical tensions in the Middle East and expectations of a significant Fed rate cut in September provided some support.
Federal Reserve Insights
Barkin’s Perspective: Fed official Thomas Barkin emphasized that the Federal Reserve is focused on current data rather than trying to anticipate future trends. While acknowledging the recent weaker manufacturing ISM and NFP data, Barkin noted that the Fed is not seeing significant layoffs, though job creation remains a concern.
Austen Goolsbee's Remarks: Another Fed official, Austen Goolsbee, highlighted the current restrictive stance of monetary policy, suggesting that the economy might be in a normalization phase. He cautioned that if the Fed has indeed "overreacted" with its policy tightening, it should remain vigilant to adjust accordingly.
Markets are awaiting further data releases, including Canada's employment change report and additional U.S. labor market figures, which could provide more direction for global markets.
