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Iranian Foreign Ministry spokesman: Tehran is still weighing its response to the US proposal.On May 8th, Adam Salhan, CEO of 50 Park Investments, stated that the jobs report was slightly stronger than expected, neither too hot nor too cold. The data wasnt strong enough to trigger more inflation or cause problems for the Federal Reserve, but it was enough to alleviate market concerns about stagflation and an economic slowdown. Ultimately, it all comes down to the Federal Reserve. The unemployment rate hasnt risen, and the market can confidently confirm that it remains low for the Fed.On May 8th, Andrew Grantham, an economist at CIBC Capital Markets, stated that Canadas job losses in April and the rise in the unemployment rate from 6.7% to 6.9% indicate an increasing degree of slack in the labor market. Canadas employment decreased by 17,700 in April, with a further decline in full-time jobs being the main drag. In the first four months of 2026, Canadas full-time employment is projected to decrease by approximately 47,000, a drop of about 0.3%. Grantham stated that the increased slack in the labor market should limit the spread of oil price shocks to other goods and services sectors. He added that this data further strengthens CIBCs expectation that the Bank of Canada will maintain a wait-and-see stance in 2026.White House National Economic Council Director Hassett: Emphasizes fiscal responsibility to address debt.On May 8th, TD Securities U.S. interest rate strategist, Molly Brooks, stated that the market reaction was in line with their expectations, with a fairly mild response to the higher-than-expected non-farm payroll data. They previously believed that any dovish data—whether it was a rise in the unemployment rate or non-farm payroll data near zero or negative—could trigger a larger market reaction. This report suggests that there is no conflict between the Feds dual mandates. In the short term, they will continue to focus on the inflation mandate, as this mandate is more likely to deviate from its target.

Despite contradictory inflation indicators from China, USD/CNH recovers to approximately 6.7700

Daniel Rogers

Jan 12, 2023 14:43

USD:CNH.png 

 

After dipping to roughly 6.7550 during the Asian session, the USD/CNH pair has risen. Despite China's National Bureau of Statistics (NBS) releasing contradictory Consumer Price Index (CPI) data for December, the asset has recognized demand and extended its recovery to near 6.7700.

 

The annual CPI has remained unchanged at 1.8%, which is in line with forecasts and higher than the prior statement of 1.6%. In contrast, the price index at the factory gate has decreased dramatically, indicating that producers have less negotiating power. In contrast to forecasts, the Producer Price Index (PPI) decreased by 0.7% rather than 0.1%.

 

The swiftness with which the Chinese government reopened the economy after a lengthy suspension to combat the Covid-19 epidemic has instilled optimism among market participants. The market anticipates a sharp improvement in economic prospects and foreign trade.

 

Morgan Stanley analysts have increased their forecast for China's Gross Domestic Product (GDP) this year to above 5%. "If policy can reduce obstacles to the housing/property sectors and COVID zero recovery, China's economic recovery should strengthen beginning in the second quarter of this year," they added.

 

In the interim, risk-sensitive assets are performing well due to investors' enhanced risk appetite, as indicated by the S&P 500 futures' string of weekly increases. The 10-year US Treasury rates have decreased to 3.55 percent due to optimistic market attitude. The US Dollar Index (DXY) has encountered resistance above 102.80 and has swung to the south in advance of U.S. inflation data.

 

Analysts at Wells Fargo believe that a further decline in energy costs will weigh on the headline and balance price rises in food and core services. However, the price decrease will also be assisted by a further decline in core products, led by used autos once more.


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