Breaking! U.S. Non-Farm Payrolls Surprise, Fed Rate Cut on the Horizon, PPI and CPI Data Become Key Suspense!
The financial world is in an uproar! The U.S. non-farm employment data stunned everyone, like a deep-sea bomb, instantly igniting the market's fervent expectations for a Fed rate cut. Although the U.S. dollar remains strong and elusive, investors have already been unable to contain themselves, wildly betting on a rate cut this month, with the probability soaring to 99%. The center of this financial storm is about to face a more critical "data test"!
In the coming week, global investors will closely focus on the ups and downs of U.S. economic data:
- Monday: The New York Fed will fire the first shot, announcing the August one-year inflation expectations to set the market mood.
- Wednesday: The U.S. August PPI data will be released, as it is a leading indicator of inflation, directly related to the market's expectations of the Fed's monetary policy. Meanwhile, the July wholesale sales monthly rate will also be unveiled, adding more context to the pace of economic recovery.
- Thursday: Known as "Super Thursday" for data! The U.S. August CPI data will arrive alongside the initial jobless claims numbers. As the core indicator of inflation, any slight fluctuation in CPI can trigger significant market turmoil, while initial jobless claims serve as a barometer of the labor market's health. The interplay between the two will provide critical basis for the Fed's decision-making.
- Friday: The preliminary value of the U.S. September one-year inflation rate and the Michigan University Consumer Confidence Index will be announced successively, marking the end of this week's data feast and also indicating the market's latest outlook on future economic trends.
It is worth mentioning that if the August PPI data exceeds expectations again, investors' dovish expectations for the Fed rate cut may significantly diminish. However, under the current circumstances, the impact of tariffs on commodity prices is relatively mild, while the quiet rebound of inflation in the service sector is the tricky problem the Fed urgently needs to address. According to the Cleveland Fed's real-time forecasting model, the overall year-on-year CPI for August is expected to rise slightly by 0.1 percentage points to 2.8%, while the core CPI year-on-year likely remains at 3.1%.
In this ever-changing financial battlefield, every piece of data could become the last straw that breaks the camel's back.
