A Busy Week For Trading; Focus On US CPI Inflation And FOMC Minutes.
Last week, Nonfarm Payrolls (NFP) in the US rose by 194K in September. This reading missed the market expectation of 500K by a wide margin. On a positive note, the August print of 235K got revised higher to 366K.
Further details of the publication revealed that the Unemployment Rate declined to 4.8% from 5.2% in August, compared to analysts' estimate of 5.1%. Additionally, the Labor Force Participation Rate edged lower to 61.6% from 61.7%, and the wage inflation, as measure by the Average Hourly Earnings, rose 4.6% on a yearly basis as expected.
The US dollar stayed strong last week, as a surge in energy prices raised the risk that the U.S. Federal Reserve would act sooner to normalize policy.
Looking ahead, the U.S. consumer price index will release Wednesday.
Consumer prices are expected to have risen 0.3% last month and 5.3% over the prior year, according to estimates. Excluding the cost of food and fuel, core inflation is projected to be 4.0% on a year-over-year basis.
In the upcoming week, the minutes of the FOMC meeting due Wednesday is expected to provide investors with an insight into the Fed thinking on monetary policy.
In the last meeting, the Federal Reserve said it will likely begin reducing its monthly bond purchases as soon as November and signaled interest rate increases may follow more quickly than expected as the U.S. central bank turn from pandemic crisis policies gains momentum
FOCM Meeting showed that maintaining bond buying of $120 billion per month. Inflation levels are elevated on transitory factors. The economy has made progress toward the tapering threshold. Raised individual counterparty reverse repo limit to $160 billion from $80 billion.
Moreover, focus on US PPI inflation data on Thursday. Economists predict that PPI rose by 0.6% last month. On the other hand, Core PPI is expected to have increased by 0.5%.
11 Oct 21 (Mon)
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