Gold hits record, but not in inflation-adjusted terms | MarketTalk: What’s up today? | Swissquote

Show notes

The US economy added 275K new nonfarm jobs last month, significantly more than around 200K new job additions penciled in by analysts. But happily, the unemployment rate unexpectedly rose to 3.9% and wages grew slower than expected on a yearly basis and were almost flat on a monthly basis. The fact that another strong NFP read didn’t translate into higher wages gave a peace of mind to investors. US yields fell and the US dollar index tumbled in the immediate aftermath of the US jobs data, the EURUSD spiked to 1.0980.
While I found that the dollar selloff was a bit exaggerated – given that the US economy still added 275K new nonfarm jobs and wages grew 4.3% on yearly basis, more than twice the Fed’s inflation target - Friday’s reaction to the jobs data revealed an important information: investors don’t care about the strength of the US economy and the labour market, they only care about inflation.
This week, attention shifts to the US CPI print, due tomorrow. The headline inflation is expected to steady near 3.1% on a yearly basis, core inflation is expected to have eased from 3.9% to 3.7%. But the monthly figures could print another strong month. If that’s the case, we shall see a softening in dovish Fed expectations. Remember, Fed Chair Powell said last week that the Fed ‘can and will’ start cutting the rates this year, but he also said that they are in no rush.
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