Okay, here’s a breakdown of the key details from the provided text, focusing on the economic aspects and opinions:
Key Points:
US Labor Market Data: The article discusses the importance of the upcoming “Nonfarm Payrolls” figures for the US labor market. These figures,along with price growth,are crucial for the Federal Reserve (Fed) in setting interest rates.
Interest Rate Cut Expectations: The market is pricing in a 25% probability of an interest rate cut when the US interest committee meets in July. The probability increases to 80% for a cut at the September meeting.
ADP Figures: Recent ADP figures (employment data from the private sector) came in significantly below expectations, showing a loss of 33,000 jobs in June. This has increased tension regarding the state of the labor market.
Decreased Labor Demand: There are signs that demand for labor has decreased, with a slightly rising trend in unemployment claims.
Nonfarm Payrolls expectations: Expectations are for 106,000 new jobs to have been created in June (a decrease from the previous month’s 139,000). Unemployment is expected to rise slightly from 4.2% to 4.3%.
Fed’s Current Stance: The Fed has kept the key policy rate unchanged since December of last year.
Factors Influencing Interest Rate Expectations:
Weaker growth in the US economy.
Signals of an early appointment of a new central bank governor (possibly more dovish, aligning with Trump’s preferences).
Quotes and Opinions:
Marius Gonsholt Hov (Chief Economist, Handelsbanken Capital Markets):
The figures will be an critically important check.
The ADP figures “increases the tension.”
The market prices in more interest rate cuts in the future.
The market envisions that there is a bit more “dual”,ie in the direction Trump wants.
Erica Dalstø (Chief Strategist, SEB):
Expectations point to a very gradual dismantling in the labor market.
In summary: The article suggests that the US labor market is showing signs of slowing down, which is increasing expectations for interest rate cuts by the Federal Reserve. The upcoming Nonfarm payrolls data will be a critical indicator of the labor market’s health. The potential for a change in Fed leadership is also influencing market expectations.
