DIFX Buzz: Here’s a weekly market recap for you to start your Monday with the top news of the week.
Read the Data
Let’s take a quick look at some market data:
Nonfarm Payrolls
❖ Last week, we saw the lowest nonfarm payroll reading since the pandemic era.
❖ This is an indicator that growth in the jobs sector is slowing down.
❖ It was the first jobs data miss in 15 months as it came out lower than expected.
Wages Growth Data
❖ Wages growth, however, contradicted the slowdown in growth for the jobs sector as the data came out hotter than expected.
❖ This is a sign that the labor market is still tight as more jobs are being created than positions being filled. In simple words: more job openings than unemployed people.
❖ Due to this demand for workers, we are seeing higher wages, a sign that the Fed may need to keep rates higher for longer than previously expected.
Inflation Data
❖ The Fed relies primarily on these 2 data points as signals of where inflation is in the US economy.
❖ Core PCE is the least volatile so it garners greater importance.
❖ We see on the chart that both Core PCE and Core CPI are way off the 2% target as investors look to Wednesday’s inflation data release.
❖ Core CPI is expected to come out at 5% and it would take an extreme miss of this forecast for economists to lower projections of a July rate hike.
Look into Markets
Let’s see what happened in markets this week:
Forex
❖ The dollar has retreated after dovish comments from Fed policymakers.
❖ On Monday, Fed officials stated that we are nearing the end of the tightening cycle, spurring a selloff in the Dollar.
❖ The anticipation trade has begun with all eyes focused on Wednesday’s inflation report.
❖ Core CPI is expected to come out at 5% and with a July rate hike priced in, it would take a major surprise for economists to deviate from this forecast.
Equities
❖ Silicon Valley Bank has sued the FDIC to recover $1.93b which was seized during the bank failure in March.
❖ Zuckerberg has made comments on Threads being the more friendly alternative to Twitter and has been quoted as saying: “We are definitely focusing on kindness and making this a friendly place.”
❖ US index futures slid on Monday as investors anticipate inflation data out on Wednesday.
❖ WeChat has announced that Apple will open a store on the social media platform. Customers in China will be able to use the e-commerce features on the platform to purchase Apple products such as iPhones, iPads, and Macs.
Crypto
❖ Standard Chartered has increased its 2024 Bitcoin price prediction from $100,000 to $120,000.
❖ Ocean Protocol, an AI-driven decentralized data marketplace, is up 25% since July 1st as AI crypto projects begin to catch steam.
❖ The CFTC has concluded its investigations for Celsius, stating that the ex-CEO broke US rules and misled investors.
Commodities
❖ Oil fell on Monday after weak data from the US and China.
❖ The slowdown in the economic recovery from China has weighed on commodity prices this year.
❖ Innovation in EVs is expected to reduce the amount of Copper needed in production in order to decrease the weight of the vehicles. This will limit demand for the metal in the long term.
❖ Bearish Dollar sentiment after dovish comments are prompting bullish moves in Gold.
