Week in a Glance: NFP, Bank of England, Infrastructure Plan

The main event of the past week, without a doubt, was the publication of the data set on the US labor market. They were waiting for them with a sinking heart, since the preliminary signals from the ADP numbers were openly frightening (+ 330K with a forecast of + 800K). Recall that the importance of the data was due not only to the fact that they characterized the current state of affairs in the US economy, but also because they are one of the basic markers for the Fed.

So, the data on Friday came out just great. The average hourly wage has grown more than forecasts and past values, which is an indirect sign of a shortage in the labor market and an active struggle between employers for workers. The unemployment rate fell sharply, which only confirmed the excellent shape of the US labor market. Well, the cherry on top was the NPP data: they came out better than forecasted and grew by more than a solid 943K.

So it’s not surprising that the US dollar was not growing at all. The stock market is more complicated. On the one hand, an economy in great shape is a reason for growth. On the other hand, the Fed now has a reason for an earlier tightening of monetary policy. As a result, some of the US stock market indices were growing, and some were declining.

The Bank of England left the parameters of monetary policy unchanged. As expected, no revelations were announced. Accordingly, there was practically no reaction from the markets.

Another important event of the past week was the passage of the bill on the infrastructure plan in the US Senate. On Sunday, the final vote for the Senate took place and now it's up to the House of Representatives.

Well, the reporting season, having passed its peak, slipped into the sunset. However, the overall picture remains unchanged - this season remains one of the best in recent decades.

The coming week is interesting primarily with inflationary data from the US. If they again confirm the continuation of the inflationary spiral, then together with the data on the US labor market, they may drive the Fed into a corner.

Of the basic positions for the week, perhaps, it is worth noting buying the dollar on the foreign exchange market, selling on the US stock market, selling oil on the commodity market.