Having spent a long time wondering why the US ten-year yield hadn’t broken above 3%, last night Wall Street responded to the breakout by deciding rising rates are not such a good thing after all, strong economy notwithstanding. As to whether a more major pullback is in the offing is unclear, but tonight’s jobs report has just become a little more critical than it might otherwise have been.
Back in January, a spike in US wage inflation to 2.9% monthly growth sparked a correction. That same result was achieved last month, and Wall Street didn’t blink, After all, rising wages imply greater spending power in the consumer-led US economy.
But it also points to inflation. Tonight’s headline jobs number will not be that important. It will be the wage growth figure that will be closely watched. A hot number may risk a repeat of January.
And for more on inflation, the US PPI and CPI are out next week.
Note that Monday is Columbus Day in the US which closes banks and the bond market but not the stock market.
Locally the banks are in focus next week, but this time for the right reasons. ANZ’s job ad series is out on Monday, NAB’s business confidence survey on Tuesday and Westpac’s consumer confidence survey on Wednesday. Housing finance numbers and the RBA’s Financial Stability Review are due on Friday.
China’s September trade numbers are out on Friday.
There remain a few ex-dividends to get through in the local market next week, but they are now very few. We’ll soon be hitting the thick of AGM season, but ahead of that we’ll see a raft of quarterly reports and updates, and specifically resource sector production reports.
Whitehaven Coal ((WHC)) releases its report on Thursday.
