07/09/2026
Rate hike, or not? This week's US PPI an important guide
🇺🇸On Friday night, markets got back to worrying about a rate hike possibility after US non-farm payroll figures increased by 162,000, significantly above expectations of around 55,000
U3 unemployment (% of the civilian labor force that is jobless, available to work, and has actively searched for a job within the past four weeks) remained unchanged (4.1%), while U6 underemployment (includes the U3 unemployment number, plus marginally attached works and involuntary part-time workers) dropped to 7.7%, from the recent high of 8.2%
Meanwhile, wages are tracking at a relatively unchanged 3.1%, below inflation
Some analysts believe that the U3 unemployment and wages have become the more important indicator of labour market tightness, and believe that the Fed will be paying attention to this rather than the higher than expected non-farm payroll figures
This week's PPI August data released on Thur night and CPI Aug numbers released on Fri night may also be key to whether the Fed stands pat or raises rates on the 16th this month
🇨🇳In China, Aug trade and inflation data will be made available, starting with Aug export numbers that will be announced tomorrow. Exports are expected to grow 25% year on year - with PMI figures released last week already setting expectations for a strong export growth number
China's PPI inflation, to be published on Wed morning, is expected to rise to 3.7% in Aug
📰In other news, Bloomberg reported yesterday that China is injecting billions into its largest banks and insurers, as Beijing moves to shore up balance sheets and sustain growth in a slowing economy
According to exchange filings and a Xinhua report, at least 8 financial institutions are seeking 360 billion yuan (USD 53.6 billion) in fresh capital, with China's Ministry of Finance providing more than 80% of the funding via the issuance of 300 billion yuan worth of special bonds
The Hang Seng Index (HSI) September futures index has pulled back 0.6% lower to 25,500 as of 939AM this morning after last Friday's 2.1% rally
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