The July 4 holiday in the United States may well bring a quiet start to the week for world markets. But don’t bet on it.
Economists polled by Reuters expect 200,000 new jobs were created in June, a slowdown from recent monthly growth. In May, non-farm payrolls increased 339,000, well above estimates, although a surge in the unemployment rate to a seven-month high of 3.7 per cent suggested that labour market conditions were easing.
Monday’s Caixin purchasing managers index for the manufacturing sector may show business conditions deteriorating, Societe Generale analysts say, citing “high-frequency data.” To keep 2023 GDP growth above 5 per cent, authorities are likely to continue cutting rates, step up support for home buyers and increase investment in high-tech manufacturing. And if growth deteriorates further, a “more aggressive” response is likely, analysts say.The Reserve Bank of Australia and economic data have conspired to give markets repeated cases of whiplash ahead of Tuesday’s highly anticipated policy decision.
The upshot? Market odds are just 1-in-3 for a third consecutive quarter point bump on July 4, and an Aussie dollar languishing at multi-week lows. Considering the May hike was also a line-ball call, neck stretches seem advisable.The Wagner mutiny, the gravest threat to Russia’s Vladimir Putin’s rule to date, might have been aborted, but will long reverberate. Any changes to Russia’s standing – or to the momentum behind the war in Ukraine – could be felt near and far.
IMF researchers calculate that in the first quarter, corporate profits accounted for 45 per cent of the annual rise in euro area inflation, by far the largest contributing factor, and that ratio is similar elsewhere.