Jobs Data Fuels Rate Hike Speculation Amid Ongoing Global Tensions
US markets opened after the Labor Day holiday with strong jobs data from Friday's report. The numbers exceeded expectations, increasing speculation that the Federal Reserve could raise interest rates at its September meeting.
The higher-than-anticipated US jobs report led to a stronger dollar, but liquidity was lower due to the holiday closure, allowing USDJPY to make sharp moves.
Meanwhile, tensions in the Middle East remain high, particularly around Iran and the Strait of Hormuz. This has kept crude oil prices elevated, adding to inflation concerns.
Higher oil prices can put pressure on inflation and support higher yields and interest rates. The focus will shift to key inflation data this week, with US PPI and CPI reports on Thursday and Friday respectively.