US jobs growth was weaker than expected, but wage inflation was a touch firmer than forecast. This week’s key data to watch is Chinese inflation on Wednesday.
In our deep dive interview, ANZ’s Senior China Economist Betty Wang and ANZ’s Senior Commodities Strategist Daniel Hynes drill down into how commodities demand shifting from China to India will affect Australia’s exporters.
5 things to know at 6am
US non farm payrolls grew 187,000 in July, which was below the 200,000 consensus. Wage growth of 4.4% was a bit hotter than consensus forecasts.
The US 10 year Treasury yield dropped two basis points to 4.04%, well below Thursday’s nine-month highs. The two year yield fell two points to 4.77%. A negative yield curve like this normally signals a recession. Not this time, says ANZ’s Tom Kenny.
WTI oil rose another 1% to US$83/bbl. Tighter Saudi Arabian and Russian supplies are squeezing prices up. Ukraine’s weekend drone strike on a Russian oil tanker didn’t help.
The RBA has forecast inflation to fall under 3% by the end of 2025. ANZ’s Adam Boyton says that supports a cash rate pause, with a hawkish tinge.
Chinese CPI and PPI inflation figures on Wednesday are expected to confirm a weak economy is generating deflation.
Cheers
Bernard
