Markets Eye NFP Data For Further Guidance

(MENAFN- Mid-East Info)

• Risk appetite steadies as PCE stabilises
• US NFP in focus for further insight into the US economy

By Daniela Sabin Hathorn, senior market analyst at Capital

After a week dominated by cautious Fed rhetoric, Friday's US PCE inflation landed broadly as expected. Core PCE has effectively stabilised around 2.9% for a second month-awkward for policymakers, but not hot enough to derail the easing path that futures markets have been leaning toward. Equities reversed higher into the close and carried that momentum into Monday.

This week, the focus shifts to the US employment data to be released on Friday. Consensus points to a modest payrolls gain (near 51k) and unemployment around 4.3%. The event could spark some volatility in markets, with the VIX likely seeing some movement before the release. An in line (or slightly softer) reading supports risk and reinforces near-term rate cuts. A stronger than expected reading suggests that growth remains resilient, with risk assets still being able to digest it if inflation anxiety doesn't flare. On the flip side, a decisively weak reading would raise growth worries and questions to whether the Fed is already behind the curve with policy easing, likely weighing on growth but pushing gold higher.

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Past performance is not a reliable indicator of future results.

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