DXY is a flamed-out rocket.
AUD chaos!
AUD big short still intact.
Lead boots into the pit.
Gold up, oil down.
Metals mixed.
Mining big bear plods on.
EM bust.
Junk down, yields down, growth no bueno.
Stocks smashed.
ISM was soft. US jobs and PCE were a bad combination Thursday and Friday. PCE was warm on tariffs. BEA.
From the preceding month, the PCE price index for June increased 0.3 percent. Excluding food and energy, the PCE price index also increased 0.3 percent.
From the same month one year ago, the PCE price index for June increased 2.6 percent. Excluding food and energy, the PCE price index increased 2.8 percent from one year ago.
Jobs were cold on tariffs. BLS.
Total nonfarm payroll employment changed little in July (+73,000) and has shown little change since April, the U.S. Bureau of Labor Statistics (BLS) reported today. The unemployment rate, at 4.2 percent, also changed little in July. Employment continued to trend up in health care and in social assistance. Federal government continued to lose jobs.
Revisions for May and June were larger than normal. The change in total nonfarm payroll employment for May was revised down by 125,000, from +144,000 to +19,000, and the change for June was revised down by 133,000, from +147,000 to +14,000. With these revisions, employment in May and June combined is 258,000 lower than previously reported.
Wages are strong.
Trump is weak. FT.
Donald Trump has stepped up his assault on the US’s most important economic institutions, sacking the head of the country’s labour statistics agency just hours after a gloomy jobs report.
I’m the first to admit that labour market statistics are a crapshoot, but sacking folks after bad reports belongs in Beijing.
Where does this obvious stagflation leave us?
Normally, I would say that the Fed should “look through” the tariff price shock and focus on jobs.
However, wages are strong after immigration was slashed, so there is some legitimate concern about inflation pass-through despite weak jobs, offset by strong productivity (though it rolled over in Q1).
This will worry the Fed, so I would not be jumping to conclusions about imminent cuts.
AUD is still under pressure until proven otherwise.
