The latest analysis of popular markets from our team of industry experts.
Friday’s non-farm payrolls report beat market expectations with a read of 255K jobs created in July against a forecast of 180K. The data revived Fed hawks and brings rate hikes by the end of 2016 back on the table. However, with the Bank of England upping stimulus in response to the Brexit vote, a major question now is: could the Fed hike rates, given that the rest of the world is playing on the loose side of the game?
On the agenda next week, the Reserve Bank of New Zealand is expected to lower its cash rate by 25 basis points to 2%.
In Asia, China’s inflation figures and retail sales will also be in focus. LCG’s Ipek Ozkardeskaya says softer Chinese inflation and slower-than-expected growth in retail sales volumes could trigger a new sell-off in the Aussie, oil and commodities.
US crude traded below $40 earlier last week, yet managed to recover above this level as analysts insisted that the bear market would not last due to lower production globally. However, a sustainable recovery in the oil market is still not a done deal. A failure to hold the ground above the $40 level could revive fears of a fresh sell-off.