It’s All About The Jobs For The USD
We have the first Friday of July coming up next week, which of course means it’s time for another NFP print. Markets will be watching this incoming print like a hawk after the June FOMC meeting.
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At the meeting, we saw enough FOMC members have a change of heart about the economic outlook. So much so that the Fed’s dot plots showed that a big chunk of members had a change of heart and saw the number of votes for a first lift off in rates in 2023 increase from 7 members in March to 13 in June.
That wasn’t enough for us to change our med-term neutral outlook for the Dollar as the Fed still stuck to their transitory inflation guns, and with there still a lot of “substantial progress” required in the labour market before they will look to actually start tapering asset purchases.
However, that does mean that the Dollar will be very sensitive to incoming data, especially labour market data, as the market will use that as a gauge for the Fed’s policy normalization path.
We’ll go through all of that in this week’s week ahead video.
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