FXStreet (Bali) – Following a ambiguously US NFP solid report, attention now shifts to Atlanta Fed President Lockhart, who will speak twice on Monday, notes RBS, which remains of the view that US NFP in July is consistent with a rate hike by the Federal Reserve in September.
Key Quotes
“We see the overall employment report in July as consistent with a rate hike in September, and that remains our house view. While headline employment slightly missed relative to consensus, the unemployment rate held steady and underemployment rate edged down further.”
“After the BoE’s “Super Thursday” left the impression that an early 2016 hike (long our base case) is more likely than a late-2015 rate hike, the FOMC appears to reclaiming the top spot on the G10 “hawkish league table” that it held for much of late 2014 and early 2015, and we think that can continue to benefit the USD.”
“The key release this week is likely July monthly retail sales. While monthly sales growth has been inconsistent, we expect the underpinnings of a strong 2H consumer outlook to remain in place, and the private auto sales figures for July released early this month bode well for retail outlays overall.”
“After suddenly becoming among the most closely monitored FOMC officials, Atlanta Fed President Lockhart speaks twice on Monday. His comments to noted Fed-watcher Jon Hilsenrath in the WSJ were not off-the-cuff, meaning it’s perhaps unlikely that he tones down or alters his comments next week, particularly as we see the July labour report consistent with his view on the outlook for the labour market.”
“The initially-reported contraction in 1Q GDP (now reported as a small increase) helped produce a surge in unit labour costs, which is labour costs measured per unit of GDP. Stronger GDP growth in the second quarter, as a result, may weigh on 2Q ULC. Second quarter productivity growth is also due.”
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