NFP and CPI Reports Complicate US Dollar's Path

The US dollar's path is complicated by the upcoming Nonfarm Payrolls (NFP) report and Consumer Price Index (CPI) releases, according to BNY strategists John Velis and David Tam. They expect around 80,000 new jobs in July, with a breakeven rate near 50,000 to keep unemployment steady.

A weaker print could lead to lower 2-year yields and decreased expectations of rate hikes. The strategists stress that sticky inflation, supply shocks, AI-related capital expenditures, and constrained labor supply are factors keeping US rates pricing unsettled.

The July NFP report is due on Friday, followed by two more CPI releases. The market will also be watching for insights from Federal Reserve Chairman Jerome Powell's speech at Jackson Hole at the end of the month.