August 2, 2024
United States:
United States:
US Unemployment Rate Rises Again, Cementing Path to Fed Rate Cut
US hiring slowed markedly in July and the unemployment rate rose to the highest level in nearly three years, suggesting a faster deterioration in the labor market than previously thought and putting the Federal Reserve solidly on a path to cutting interest rates in September.
Nonfarm payrolls rose by 114,000 last month after downward revisions to prior two months, the Bureau of Labor Statistics said Friday. That was lower than all but one forecast in a Bloomberg survey of economists and one of the weakest prints since the pandemic. Average hourly earnings also came in below forecast.
United Kingdom:
BOE Chief Economist Urges Against More Rate Cuts Too Quickly
Bank of England Chief Economist Huw Pill warned against anticipating further interest rate reductions soon, saying efforts to contain inflation aren’t yet finished and there’s evidence that companies are still driving up prices.
The official who sits on the nine-member Monetary Policy Committee voted against yesterday’s quarter-point reduction in the key lending rate to 5%. He said the UK has “made progress” on reducing inflation, but “it’s not yet job done.”
Asia:
Yuan Rises to Highest Since May as Short Carry Trades Abandoned
China’s yuan climbed to its strongest since May as traders walked away from bearish bets amid a rebound in regional currencies and stronger prospects for US interest-rate cuts.
The currency at one point jumped more than 0.6% in both onshore and overseas trading, making it one of the top performers in Asia. Behind the gains was an increasing cohort of traders who are abandoning a crowded strategy that involves them borrowing the yuan cheaply and selling it against a higher-yielding currency.
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