US Job Growth Slowed as Unemployment Rising

The market had expected the April report released Friday to show nonfarm payrolls rise 243k new jobs which it missed with 175k new jobs. Job growth slowed and unemployment turned higher, a break from a stretch of data showing surprising strength in the labor market. The slowing in job gains is consistent with private sector job growth slowing steadily as we have seen in the sustained rollover in NFIB hiring intentions. With eyes on wage inflation earnings also rose less … Continue reading “US Job Growth Slowed as Unemployment Rising”

Federal Reserve Confirmed Not in a Rush to Ease Rates at FOMC

The Federal Reserve kept rates unchanged in a target range of 5.25-5.50% in unanimous vote at their May FOMC, which was expected. Fed Chair Powell calmed fears during his press conference where he stated that it was “unlikely that the next policy rate move will be a hike.” The Fed tweaked their statement to recognize “the lack of further progress toward the 2% inflation objective” and to signal the QT tapering on Treasuries from $60 billion to $25 billion ($30 … Continue reading “Federal Reserve Confirmed Not in a Rush to Ease Rates at FOMC”

ECB Keeps Rates on Hold but Signals Summer Rate Cut

The European Central Bank (ECB) left all monetary policy settings unchanged, as was widely expected. The consensus forecast is for a 25bps cut by the ECB at its June 6th meeting and an additional 75bps in easing through the remainder of the year. The ECB has proclaimed it is watching inflation and wages data over the next eight weeks before beginning its easing cycle. Chief Lagarde said the ECB does not want to ‘pre-commit’ to a rate path (even after … Continue reading “ECB Keeps Rates on Hold but Signals Summer Rate Cut”

US Sees Strong Wage and Job Gains in March with Unemployment Lower

The market had expected the March report released Friday to show nonfarm payrolls rise 200k new jobs which it beat with 303k new jobs.  This follows a revised increase of 270,000 in February (from 275,000). Nonfarm private payrolls rose by 232,000 in March (consensus 160,000) following a revised increase of 207,000 in February (from 223,000). Job growth in March was led by faster hiring in health care, and construction. Leisure and hospitality jobs have now bounced back above its pre-pandemic … Continue reading “US Sees Strong Wage and Job Gains in March with Unemployment Lower”

Core Inflation Rose More Than Expected Again in January, Fed Hawkish Rhetoric Justified

Consumer prices continue prove to be sticky in the US, core CPI continues to run hot. The Fed favors the core metric as a better gauge of inflation trends. Core CPI, which excludes food and energy, was up 0.4% month-over-month (consensus 0.3%) after increasing 0.3% in December. Shelter prices, which make up about a third of the overall CPI index jumped 0.6%, accounting for more than two thirds of the overall increase. On a year-over-year basis core CPI was up … Continue reading “Core Inflation Rose More Than Expected Again in January, Fed Hawkish Rhetoric Justified”

Abundant Marketplace Liquidity and Easy Credit Availability – Bond Market Review

Friday saw a repeat for U.S. Treasuries closing out the week on a sharply lower note, yields on the 10-yr note and shorter tenors went their highest closing levels since mid-December while the long bond outperformed, keeping its yield three basis points below its highest close from last month. We saw the same last Friday with yields coming off their lowest levels of the year after the red-hot January jobs report showed headline growth of 353,000, twice as high consensus. … Continue reading “Abundant Marketplace Liquidity and Easy Credit Availability – Bond Market Review”

Reserve Bank of Australia Does Not Rule Out Future Hikes

The Reserve Bank of Australia kept rates unchanged at 4.35% as widely expected by analysts, keeping rates at the highest level since May 2012. RBA Governor Bullock sounded as there was in no hurry to cut rates describing rate risks as “fairly balanced” with inflation still “too high” and said, “a further increase in interest rates cannot be ruled out.” The messaging from the RBA was “we are not ruling in anything or out anything” and “need to stay the … Continue reading “Reserve Bank of Australia Does Not Rule Out Future Hikes”

Focus on Powell, Fed Loan Survey and RBA Interest Rate

The week was surprised by a more hawkish Federal Reserve chair this week over rate guidance and QT parameters though it barely reduced punts for rate cuts at future meetings. We get more from the Fed this week with a Powell 60 minutes interview and the Fed’s loan survey to inform on credit tightening. Also ahead is ECB inflation expectations and monetary policy decisions from Banxico, Peru, RBA, Poland. India and Thailand. There were no surprises last week from the … Continue reading “Focus on Powell, Fed Loan Survey and RBA Interest Rate”

Rates React to Fed and Strong Jobs – Bond Market Review

U.S. Treasuries closed out the week on a sharply lower note, yields coming their lowest levels of the year after the red-hot January jobs report showed headline growth of 353,000, twice as high consensus. The report fed the rationale that the Fed will maintain its hawkish rhetoric. Notably Chicago Fed President Goolsbee said that the report will not influence policy in the near term, noting that the drop in the average workweek to 34.1 hours from 34.3 hours reflected weakness … Continue reading “Rates React to Fed and Strong Jobs – Bond Market Review”

FAO World Food Price Index Fell in January 2024 to lowest level since February 2021

World food prices as measured by the FAO Food Price Index continued to fall, down for a sixth month to 118 index points in January 2024, the lowest level since February 2021. The index is 13.7 points (10.4%) lower from a year ago, well off the record hit in March 2022 after Russia invaded Ukraine. Cereals prices were down 2.2% to December 2020-lows as global wheat export prices declined amid strong competition among exporters and arrival of recently harvested supplies … Continue reading “FAO World Food Price Index Fell in January 2024 to lowest level since February 2021”