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The NFP beat means that 50bps increases for the next two Fed meets are alive and well.
As we progress through the current rate hiking cycle, unemployment is an essential economic series to monitor.
Eurozone preliminary headline inflation printed at an all-time high of 8.1% YoY for May. This number is higher than the forecast of 7.8% YoY and above the previous month's release of 7.5% YoY. The major contributor was the much higher energy prices due to Russia's invasion of Ukraine. However, it's not the only worry. Food, alcohol and tobacco price also contributed to the blowout figure.
The US 10-year Treasury note has broken out of a falling wedge pattern following hawkish comments by Fed Governor Waller.
President Lagarde prepares the market for the ECB rate hike and Fed QT to start on 1 June. FOMC minutes reaffirm previous communications, with no unexpected concerns. OPEC+ meets as China lockdowns ease. Friday sees the release of NFP as the tightening cycle continues.
Consumption makes up around 70% of the US GDP. However, all is not well with the US consumer.
NZD/USD jumped after the Reserve Bank of New Zealand hiked interest rates by 50 basis points, to 2%, the highest level since September 2016
Retail numbers are strong, with previous revised up.
The US 10-year yield has paused, but underlying momentum has not dissipated.
This is the problem that policymakers currently face. Battle inflation or protect the unemployment rate. Usually, a policy is implemented without this catch 22. This difficulty is the exact problem of stagflation, which is an economic paradox. Unfortunately, policymakers are caught between a rock and a hard place and have tough choices.
What Is An Inverted Yield Curve? An inverted yield curve is a situation in which yields on shorter-term U.S. Treasury securities are higher than on longer-term bonds, a reverse of the traditional state of affairs, where yields are higher the longer the bond's maturity. Many economists and analysts view an inverted yield curve as a signal that the U.S. economy may be poised to go into recession, because lower yields…
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