Markets react to slowing inflation while awaiting jobs data

Markets react to slowing inflation while awaiting jobs data

July 31:

Markets continue to react to the favorable inflation numbers reported Friday: The Personal Consumption Expenditures price index was up only 3.0% year over year and the core PCE price index, which excludes food and energy, was up 4.1%.

The data seem to be moving more analysts over to the camp forecasting a “soft landing” for the economy. Neel Kashkari of the Minneapolis Federal Reserve said Sunday that such a thing could be “absolutely achievable,” although some job losses are likely.

This week the focus will be on Friday’s employment report, though there are plenty of opportunities for surprises to pop up before then.

The Dow traded down this morning and Treasury yields were little changed relative to Friday morning.

Economic calendar

Tuesday, Aug. 1

  • ISM Manufacturing PMI
  • Construction Spending
  • Job Openings

Wednesday, Aug. 2

  • ADP Employment Report

Thursday, Aug. 3

  • Nonfarm Productivity/Unit Labor Costs
  • Weekly Initial Jobless Claims
  • ISM Services PMI

Friday, Aug. 4

  • Monthly Employment Report

Treasury calendar

There are no auctions of Treasury notes or bonds this week.

By Mike Kraft, Executive Director and Commercial Real Estate Treasurer for Commercial Banking
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