Clifford Bennett
Independent Analyst
Fault lines widening in US data,
US Wages
Remain stubbornly firm above pre-Covid rates of growth.
THIS IS IMPORTANT: There is now clear evidence of a wages-inflation spiral having gotten underway.
This is exactly the economic worst case scenario and suggests my already alarming forecasts for Fed rate hikes may well be exceeded. We could see a Fed Funds Rate of above 2% this year.
BREAKING NEWS: Australian Building Permits rose 3.6% last month, but this is after collapsing a staggering 13.6% previously. A disappointing rebound, if any at all to speak of. Down 10% over the past two months.
US Jobs Growth
Sinking fast. We have to understand that the flow through effects of Omicron will be substantial. While we can look to a shorter time horizon that Delta, it is still of a degree that can cause further permanent damage to the US economy.
US Consumer Credit
The problem here, is that this may well represent Americans going into greater debt just to tread water. Consumer credit growth has remained stubbornly firm above pre-Covid normal levels and could even be headed to a new high.
US Un-employment
There may be jobs on offer, but few seem that interested. The impact of Covid has been profound in terms of how people want to mange their lives going forward. If they have the finances, why not stay home and sidestep most of the danger of this period. The improvement in the un-employment number is good to see, not quite back to pre-Covid but close. Yet, it is how it is more about the withdrawal of workers that is troubling.
Euro Area Inflation
We have seen a massive shift in upward momentum over the past year. This may begin to wane at some time, but considerable damage is already in place.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.