Last Friday we were all bombarded with headline news for poor jobs (NFP) but we did not neglect to take into account 2 things:
a. unemployment rate dropped (good for dollar) - important
b Average hourly rose by 0,8% (vs 0,2% forecast) - VERY IMPORTANT!!!
Why was average hourly so important?
Well first let's understand what Average Hourly is:
It is the change in the price businesses pay for labor. When the Actual is greater than 'Forecast' is good for currency. It means this - INFLATION!
WAGES GROWING =
right now IS GREAT NEWS FOR CENTRAL BANKS!
Well let's keep it simple: If they owe 70 trillion dollars (for example) and the economy is worth say 10 trillion dollars, they would prefer the economy to be worth 20 trillion dollars because that way the debt becomes a smaller percentage of the wealth. More controlable.
So what happens next??
Well, if last Friday we had (headlines were misleading you all on the poor jobs but we didn't get tricked) then on Wednesday we have the BIG numbers coming out:
CPI and CORE CPI coming out in 2 days :
Change in the price of goods and services purchased by consumers;
Usual Effect 'Actual' greater than 'Forecast' is good for currency;
Consumer prices account for a majority of overall . is important to currency valuation because rising prices lead the to raise interest rates out of respect for their containment mandate;
Got is guys? is KEY 🔑
Want some more?
On Wednesday we will also know the Federal Budget Balance (Difference in value between the federal government's income and spending during the previous month).
In other words, have fun struggling with these markets conditions until Wednesday. After that, things will be crystal clear.
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I have a question, so right now it still isn't clear if the us dollar continues to crash till wednesday?
Will you update the post on wednesday about your view of the us dollar when the numbers coming out beacuse things starting to get interesting :D