Digesting the data

Equity markets are off to a difficult start on Monday, no doubt weighed down by the prospect of more rate hikes and tensions between the world’s two largest economies.

While there were some promising aspects of the jobs report – cooling wage growth and higher participation – it’s impossible to ignore the fact that the labour market remains red hot. Of course, no one will be surprised if we see huge revisions next month – we’ve seen some substantial ones recently after all – but for now, it’s hard to argue that the easier policy move for the Fed is to keep hiking in 25 basis point increments.

The problem the central bank faces is that while it may get within reach of the target fairly quickly, it is likely to be concerned about the last stubborn step that will be difficult without generating a little more slack in the labour market. It’s unlikely to settle well above 2% and hope for the best.

The good news is that there’s plenty more data to come before the next meeting alone that could soothe some of those concerns and so there’s plenty more time for investors to pick themselves back up. But the combination of stubborn inflation, more hikes, and a really quite disappointing earnings season is a bitter pill to swallow.

Hanging on

Bitcoin has had a few rough sessions but broadly speaking it still looks in good shape, sitting within the range it’s traded in over the last couple of weeks and not far from the new year highs. Not bad considering the losses we saw elsewhere towards the end of last week.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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