(03 AUGUST 2018)DAILY MARKET BRIEF 2:US job growth has consequences

If the USD needs any more evidence of economic acceleration, it should come today. US payrolls are expected to increase by 193,000 for July, unemployment will fall to 3.9% from 4.0% and, potentially most important, average hourly earnings are expected to advance 2.7%. That said, US labour markets have run so hot for so long with the economy at full capacity, the prospect of a breakout in wages is high. Risk of US inflation has risen, drawing threat of an interest hike. Strong labour markets provide President Trump a base from which to aggressively negotiate on trade: so short China.

By Peter Rosenstreich