Are you ready to stay ahead of the curve with the latest updates in the world of finance? This week, all eyes are on Friday’s US employment situation report, set to be released at 12:30 pm GMT. The report is crucial as it follows a series of downside surprises in key measures for July, which led to declines in US Treasury yields and the US dollar.
According to a Reuters poll, the median estimate for the August non-farm payrolls report suggests that 163,000 jobs were added to the US economy, an improvement from the 114,000 added in July. Additionally, the unemployment rate for August is expected to decrease to +4.2% from +4.3% in July, while average hourly earnings wage growth is anticipated to see a modest increase on both month-on-month and year-on-year measures.
In light of the data’s softness this week, there is speculation that a bulky 50 basis point rate cut could be on the horizon. This potential rate cut may further impact US Treasury yields and the USD. However, it’s important to note that bad news in the market doesn’t always translate to good news, especially with recession fears looming, which could lead to a decrease in stock prices following a soft employment report.
Before Friday’s release, key economic indicators such as US JOLTs Job Openings, ADP non-farm employment change, and weekly unemployment claims will be published throughout the week. Additionally, the Institute for Supply Management (ISM) data for August related to manufacturing and services will provide valuable insights into the state of the US economy.
In Canada, the Bank of Canada (BoC) is scheduled to make an announcement on Wednesday at 1:45 pm GMT. Investors are already pricing in a 25 basis point rate cut, marking the third successive rate cut for the central bank. The BoC’s decision is supported by the country’s economic landscape, with CPI inflation rates easing to their lowest levels since early 2021. BoC Governor Tiff Macklem has indicated that further cuts in the policy interest rate may be expected if disinflation progresses.
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