Energy & precious metals - weekly review and outlook
Investing.com — Is the macro picture for oil and gold changing? The softer-than-expected U.S. jobs numbers for June sent both crude and the yellow metal rallying on Friday as the dollar tumbled its most in a day percentage-wise since February. All eyes are now on the coming week’s reading on inflation, which, if tame, could unleash more risk appetite.
Yet, there’s no sign that the Federal Reserve — which is the point of all this fuss — is having a rethink about raising rates at least twice more before the year is out.
The Fed, as we know, has brought rates to a peak of 5.5% from the 0.25% they stood at prior to the pandemic. While the central bank paused its rate hike cycle last month, there’s every chance it could resume that when it meets on July 26 for its next rates review.
To be sure, Chicago Fed chief Austan Goolsbee made no bones on what he thought about the jobs report, telling CNBC soon after it was out:
“I still want to see the inflation data. I haven't seen anything that says one or two more rate hikes this year is wrong. We can have one to two more rate hikes this year.”
U.S. employers added 209,000 jobs in June, according to Labor Department data on Friday that came in below economists’ estimates for the first time in 16 months, signaling progress in the Fed’s bid to fight inflation with higher interest rates.
There was an important caveat though: Wages expanded by 0.4% from a 0.3% growth in May even as the unemployment rate remained unchanged at 3.6%.
The Consumer Price Index — whose release next Wednesday everyone is waiting for - grew at 4% per annum in May. The Fed’s favorite price indicator, the Personal Consumption Expenditures, or PCE, Index, meanwhile, expanded by 3.8%.
Both are twice higher than
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