Volatility to Continue Ahead of US Jobs and Inflation Data
XM Group | Aug 25, 2023 09:26AM ET
NFP report and PCE inflation to raise the stakes
It's payrolls week in the United States and the August numbers will be eagerly awaited on Friday as, apart from some signs already that jobs growth is slowing, the latest S&P Global PMI survey raised a few alarm bells about hiring conditions. Nonfarm payrolls are projected to have increased by 170k in August, moderating from the 187k jobs added in July.
The Australian dollar, which is viewed as a liquid proxy for China-related risks, has taken quite a beating lately following a series of downbeat Chinese data. China’s slowdown is already being felt across the Australian economy as pointed by the recent dismal PMIs.
Next week, the focus will be on domestic barometers, comprising July retail sales (Monday), monthly CPI prints (Wednesday) and Q2 capital expenditure (Thursday).
In recent meetings, the Reserve Bank of Australia had become more concerned about growth than inflation. If the annual CPI rate maintains a downward course in July, the RBA would have little incentive to hike rates again, and unless there is a turnaround in risk sentiment, the aussie looks poised to remain under pressure.
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