Mixed Global Markets Start New Week Amid Cooling US Labor Market
Global markets started the new week on a mixed note due to the cooler-than-expected US labor market. The weak nonfarm payrolls last week, which fell short of expectations by 62,000, eased concerns about hawkish monetary policy from the Federal Reserve.
The likelihood of the Fed maintaining interest rates in September rose to 53%, while the probability of a rate hike was priced at 71% for October and 83% for December, according to money market estimates. Analysts attribute the drop in employment, particularly in services, to the conclusion of the FIFA World Cup in July.
All eyes are now on the US inflation data release this week, which could further ease hawkish expectations over Fed monetary policy and lead to increased volatility in markets before and after the data is released.