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What are the latest US job numbers and how might they affect Fed rate‑cut expectations?
US job numbers are softer than expected, but is inflation going to keep rate cuts away from the Fed agenda? We get fresh CPI data for the US this week. What impact will that have on the path of rate cuts? Well, it does depend a fair bit on who the new Jerome Powell is, and we might find the answers to that soon. And maybe Wednesday is the day when we hear the US Supreme Court's opinion on the legality of President Trump's tariffs. It's going to be an interesting week, kicking off with Australian Household spending this morning. It's Monday. It's the twelfth of January twenty twenty five. It's the morning call from Nab. Good morning. Well, since the start of the year, US shares have had a good run and it's fairly broad-based as well.
The Russell two thousand is up five point seven percent, for example, but it's not just the US, so the NICE is up uh over three percent. So is the DAX. The notable exception has been the ASX two hundred, not gaining any ground so far this year. The Aussie dollar and the US dollar have gained ground, though, whereas most other currencies have slid for the year to date. The Aussie is uh almost at sixty-six point nine US cents. Now. Commodities are higher. Not just the 4.1% rise in Brent Crude so far this year, but also a 4.8% lift in the composite for the London Metals Exchange and bond yields. Well, they've had some reasonable moves on Friday. Uh, let's talk through that with Nazray Atrill. Two-year treasuries up 4.4 basis points on Friday because presumably there are question marks.
remarks on future rate cuts and uh and a bit of data to support that reasoning last week.
Yeah, good morning, Phil, and uh welcome back and um happy new year to all of our listeners. Um yes, obviously keen anticipation um as we went through last week of those um labour market numbers uh and what if any implications they would have for the near term course at least of Fed policy. And and the bottom line there was that um even though we might mention in passing that uh the truth social um website actually published some numbers twelve hours before the Bureau of Labour Statistics from which we now know that we could have deducted what those numbers were. But uh interesting the markets didn't pick up on that though, isn't it? It's interesting the markets didn't pick up on the right.
How could the upcoming US CPI and PPI releases shape the Fed’s policy path?
It may be there wasn't it was uh I mean the market had closed on uh on Thursday but um and I think a lot of people have just been so bombarded with uh well they put propaganda, whatever you want to call it on Truth Social that it sort of went straight through to the keeper. It's like either I mean the bank.
But um in which respect let's not talk about cricket. But anyway. But anyway,
yeah. Yeah, and let's definitely then go talk about the cricket. So but but the so the so the unemployment rate was the was the surprise. I mean the so the actual number of jobs was a little lower than expected.
That's right. So uh overs and unders, I think you'd say. So in terms of knee-jerk market reaction, it was the fact that the headline non-farm payrolls uh print came in at 50,000. The consensus was for 70,000, and we also had, I think it was 76,000 worth of downward revisions. So that was enough to see uh bond yields initially move lower, as did the US dollar, um, but then the unemployment rate, excuse me, um, which is what we had a point one percent downward revision to the uh to the November number, um and then another point one percent uh fall as well. So really it was sort of a uh four point four versus the four point five uh consensus. And I think the you know the the market's conclusion after um you know digesting the numbers, but it was the you know the decline in the unemployment rates that sort of carried the day and this sort of
Notion of a low higher, low fire economy, I think was sort of corroborated by you know the overall read across the uh across the payrolls numbers. So you know in in in terms of net impact, we did see um expectations for another rate cut as early as the January meeting reduced to something like five percent.
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Chapters
7 chapters
1
What are the latest US job numbers and how might they affect Fed rate‑cut expectations?
0:01–2:07
2
How could the upcoming US CPI and PPI releases shape the Fed’s policy path?
2:07–5:22
3
What impact will the Trump administration’s Fed‑chair nomination have on future rate cuts?
5:22–8:25
4
When will the US Supreme Court rule on President Trump’s tariffs and what could the market reaction be?
8:25–11:43
5
How are Canadian employment figures trending and what does that mean for the Canadian dollar?
11:43–14:43
6
Why is Venezuela considered a wild‑card for oil prices and how might US investment plans change the market?
14:43–16:34
7
What does the latest Australian household‑spending data reveal about consumer momentum?
16:34–16:43