The turn of September and October seem to abound in very interesting macroeconomic data publications from both sides of the Atlantic. There will be key information for both the European Central Bank and the U.S. Fed, including a report from the U.S. labor market.
In the Eurozone, the key data are primarily the publication of inflation for September (Friday, October 2, 11:00 a.m.). In August, it turned out that the eurozone fell into 0.2% deflation in annual terms. Currently, there is little sign that the situation is going to change, and inflation may be negative in the following months, if only because prices have fallen after the VAT reduction. The governor of the Bank of France said on Friday that the European Central Bank may begin to tolerate inflation higher than 2%, but it seems that we will have to wait several years for this.
The unemployment rate in the eurozone will be published on Thursday, October 1 at 11:00 a.m. According to the consensus, in August it could rise to 8.1% from 7.9% in July. Due to further possible restrictions in Europe, the rate might be likely to increase further in the coming months.
Meanwhile, in the United States, the uncertainty about the outcome of the elections, the lack of a fiscal package, the growing number of COVID-19 cases, may still leave its mark on the stock market. In addition, the Fed is not going to take any further steps to loosen monetary policy and wait for US labor market data.
As earlier data showed, from February to April, employment in the United States fell by 22.16 million people, and thanks to the reopening of the economy since May, more than 10.6 million of them were recovered. This only shows that after nearly six months of rebuilding jobs in the US, half of them are still outside the economy. Even if the NFP shows an increase in employment of 1 million, it will take almost a year before the outbreak of the epidemic to return to jobs to the level before the outbreak.
A report on the U.S. labor market will be published on Friday, October 2, at 2:30 p.m.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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