Market dynamics

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Will the number of U.S. jobs keep rising?

The latest U.S. monthly employment report will build on the strong performance in June, despite the U.S. economy recovering from the pandemic Rise again Number of cases in recent weeks.

Economists surveyed by Bloomberg predict that Friday’s July non-agricultural employment report will show an increase of 859,000 jobs, which is higher than 850,000. Acquired in the last month This is much higher than the 583,000 people revised in May. The unemployment rate is expected to fall from 5.9% in June to 5.7%.

Although every U.S. state is fighting the more contagious Delta variant against the soaring Covid cases, experts predict that employment will continue to increase in the coming months, filling the record 9.2 million job vacancies reported in May For the most part, this is the latest data.

Last week, the Federal Reserve statement It has made “progress” in achieving the goal of full employment.

However, investors remain vigilant about inflation, partly because employers are struggling to fill job vacancies and wages have risen. The average hourly wage in June increased by 3.6% year-on-year.

Some people cited the $1.9 trillion stimulus plan launched by the Biden administration in March, which made many people reluctant to rejoin the workforce, thereby raising wages. But as the program will end nationwide at the beginning of next month, analysts believe that wage pressures will ease.

“These enhanced benefits have expired in a few states, and even in these places, wages continue to increase. [But] David Lebovitz, market strategist at JPMorgan Chase, said that at some point here, the oil well finally dries up and people need to go back to work. Shubham Sahara

Will the bond buying department of the Bank of England expand?

Soaring inflation and a strong economic rebound have left the Bank of England divided on how quickly the stimulus measures should be ended.

Chief Economist Andy Haldane in May vote Reduce the size of the central bank’s current bond purchases from 150 billion pounds to 100 billion pounds.Although Haldane has left the central bank’s interest rate setting committee, the other two members—Michael Sanders and Deputy Governor Dave Ramsden—have already left. Suggest Monetary policy should be tightened as soon as possible.

Other committee members appear to support continued purchases before the end of the year-end plan, led by Governor Andrew Bailey. warn Oppose overreaction to temporary high inflation.

Therefore, investors will pay close attention to the voting pattern at the latest meeting of the Bank of England on Thursday.

Elizabeth Martins, an economist at HSBC, said that the market is “fully prepared for Sanders and Ramsden to vote for an immediate end to quantitative easing.” Anything other than support for continued purchases at a 6 to 2 ratio would come as a surprise.

“For a central bank that has positioned itself as a hawkish stance on a global scale, the tone this time may be more moderate,” Martins said. She added that the spread of the Delta Covid virus and the uncertainty over the end of the government’s vacation plan should help give the doves the upper hand.

Andrew Goodwin of the Oxford Economics Institute said that even so, given that the 2.5% annual growth rate of consumer prices in June was much higher than the Bank of England’s previous forecast of 1.7%, this week’s meeting could be a “violent” meeting. . Tommy Stabington

Will the central bank of India hesitate in the face of inflation?

The Reserve Bank of India is facing increasing pressure to change its monetary policy when it meets this week. Previously, the country’s retail prices in May and June increased year-on-year by 6.3%, the highest level in 2021 and higher than the central bank’s Target range.

In order to free the Indian economy from the impact of the pandemic, the Reserve Bank of India has maintained its benchmark repo rate at a historical low of 4% since May 2020. Heighten Investors worry that the era of price spikes that have long plagued India’s economic growth may make a comeback.

Many analysts said that the latest rise in consumer price levels will make the central bank’s dovish more difficult to justify. Although few people think the committee may raise interest rates when it concludes its three-day meeting on Friday, they will pay close attention to any signs that the Bank of India is considering turning to hawks in the coming months.

The Oxford Institute for Economic Research has advanced its expectations for the next interest rate hike to the first quarter of 2022, and Nomura Securities expects to raise interest rates by 0.75 percentage points next year.

But because the Indian economy is still fragile, policymakers may find themselves in an enviable position.The expected reason for the economic rebound this year ferocious The second wave of epidemics.Due to low vaccine coverage and concerns Another wave In terms of infections, exciting growth has not yet been guaranteed.

“The Reserve Bank of India is clearly unwilling to waver,” analysts at the Oxford Economic Research Institute wrote in a recent report. “However, as potential price pressures become widespread and sustained, we believe that the pressure to re-examine the balance of economic risks in the coming months will increase.” Benjamin Parkin