There was also a 2-month net revision lower of -110k, taking some of the lustre off recent gains. In contrast the June NFP jobs report showed that jobs growth slowed to 209k from 306k in May, and the slowest rate in over 2 years.

The June report was the first US jobs report which was unremarkable in nature, but also helped to knock some of the froth of the run up in yields which we’d seen in the leadup after the ADP payrolls report posted a huge jump of 497k jobs during the month. One thing does seem certain, she is unlikely to be dovish as Tenreyro whom she replaced on the MPC.Ģ) US non-farm payrolls (July) – 04/08 – having come off the back of another 25bps rate hike from the Federal Reserve, and what could be the final rate hike of this cycle, given rates are now at 20-year highs, this week’s US payrolls report is likely to underscore the resilience of the US economy. In a nutshell we can expect to see 25bps as a bare minimum, but we could also see a split with some pushing for 50bps, while it is also likely to be instructive as to which way new MPC member Megan Greene jumps when it comes to casting her vote.

The fly in the ointment for the Bank of England is the rather thorny issue of wage growth which has moved above core CPI, and could prompt the MPC to err more towards the hawkish side of monetary policy and raise rates by 50bps, with a view to suggesting that this could signal a pause over the coming weeks as the central bank gets set to consider how quickly inflation falls back over the course of Q3. With inflation for July expected to slow even more markedly as the effects of the energy price cap get adjusted lower there is an argument to suggest that we might be close to the end of the current rate hiking cycle. Forward market expectations of where the terminal rate is likely to be, have slipped from 6.5%, to fall below 6%. With core CPI also slowing by more than expected to 6.9% forward rate expectations have eased quite markedly in the past few weeks.

Our pick of the coming week’s key economic and company events, in order of importance:ġ) Bank of England rate decision – 03/08 – with inflation unexpectedly slowing more than expected in June to 7.9% it could be argued that the pressure on the Bank of England to hike by another 50bps has eased somewhat.

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