If you're looking for the hot topic of the week, you'll find it in Friday's inflation and labor market data from the USA. These were on everyone's lips and kept investors on the edge of their seats like in an exciting action movie.
Monday's ISM Services PMI disappointed investors, coming in at 54.0, below expectations of 54.8. This raised some concerns as the services sector is a key pillar of the U.S. economy. Low readings may suggest that the economy is not performing as well as expected.
Wednesday brought a moment of relief from New Zealand, where the RBNZ decided to maintain the interest rate at 2.25%. This decision, in line with forecasts, did not evoke much excitement in global markets, but reminded us that stability in monetary policy is still valued.
Friday's data on inflation and employment marked the culmination of the week. The annual CPI was 3.3%, slightly below the forecast of 3.4%, which may suggest that inflationary pressure is easing somewhat. At the same time, the unemployment rate fell to 6.7%, which was a better result than expected. These figures indicate that the U.S. labor market remains strong, even as inflation begins to stabilize somewhat.
In summary, investors can breathe a sigh of relief seeing that inflation is somewhat stabilizing and the labor market remains strong. This is a good sign for those who were concerned about a recession. However, it is worth noting that cryptocurrency markets operate over the weekend, so surprises are still possible. Therefore, let’s observe how this data will impact the upcoming week.
