All the risk assets were notably lower on Monday as investors kept pricing in soaring inflation and global economic depression. As of writing, the AUD/USD pair dropped more than 1% and slid below 0.68 again.
Chinese developments
Data from China earlier in the day revealed that annual inflation—as determined by the Consumer Price Index—rose from 2.1% in May to 2.5% in June. This number was greater than the 2.4% market consensus.
Moreover, Shanghai’s government verified the first case of the highly contagious BA.5 omicron sub-variant and issued a “very high” risk warning. City authorities are scheduled to hold a news briefing on new pandemic control measures later in the day.
In other news, Chinese Foreign Minister Wang Yi stated in a statement on Monday that he discussed the idea of creating guidelines for constructive relations in the Asia-Pacific with US Secretary of State Antony Blinken.
The senior diplomats Wang and Blinken met over the weekend, and they both characterized their first face-to-face conversations since October as “candid.”
A US official said, “neither side held back.” “We were very open about where our differences are … but the meeting was also constructive because, despite the candor, the tone was very professional.”
US labor market data
On Friday, data revealed that US payrolls grew by 372,000 in June in contrast to expectations of growth of 268,000.
In April and May, the changes in total nonfarm payroll employment were each revised lower by 68,000 and 6,000, from +436,000 to +368,000 and +390,000 to +384,000, respectively.
Following these modifications, the total number of jobs for April and May was 74,000 lower than anticipated.
You may also read: France expects to be without Russian gas
For the third month in a row, the payroll data exceeded expectations in June, and it was also the biggest gain since February.
Additionally, the jobless rate was as expected at 3.6% (and unchanged from last month).
According to reports, the workforce decreased from 164.376 million to 164.023 million, and the participation rate fell from 62.3% to 62.2%, exceeding estimates to reach 62.4%.
The support now seems to be at last week’s lows of 0.6760, and if not held, the Aussie could quickly deteriorate toward 0.65 as most of the developed countries should already be in a recession.
Comments
Post has no comment yet.