Stellar US jobs data to prompt September rate cut from Fed
|In a departure from recent trends, the data was not soured by downward revisions to the headline number. The opposite happened, with slightly more jobs created in the April-May period than had been reported earlier.
Wage pressures, meanwhile, were relatively muted and softer than expected, with the annual rate of hourly pay increases continuing to decline. While this might support the argument that the labour market is not as tight as it used to be, the overall read of the report is clearly positive. If anything, the wage aspect may help to alleviate concerns over inflation persistence.
The report appears to have been just what the battered dollar needed, with EUR/USD slumping by over 0.5% on the news. With numbers like these, investors are no longer entertaining the prospect of a July rate cut from the Federal Reserve, with September appearing to be the earliest realistic date for a return to policy easing.
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