Strong US job market boosts market outlook🙂
The trend of US disinflation continued with PPI undershooting on both headline (+0.1% MoM vs 0.2% expected) and core readings (2.4% YoY vs 2.8% prior). Initial jobless claims also undershot at 237k vs Bloomberg consensus of 250k, with the 4-week average coming in at 239k in July vs the 18m average at around 250k. The positive optics of the lower PPI coupled with a still strong labour market renewed market expectations of a goldilocks scenario, with the market pricing in ~90% of a rate hike by the end of July, but only ~30% of another rate hike before the end of the year before cuts are expected to resume.
