The jobs data was a lagging figure to begin with and even more so today with what is going on in Ukraine. I really don’t like when I hear ‘the markets don’t like uncertainty’ as life is uncertain ALWAYS with only the degree in question. We can argue though that the degree right now is pretty hot. The only certainty I have right now is the world is entering a period of slower economic growth while the inflation pressures are only intensifying. With the labor market already tight and there are plenty of jobs for those that want them, at least for now, likely the most relevant aspect of today’s data will be the wage numbers so we can gauge how well or not people are keeping up with inflation.
The estimate is for average hourly earnings to rise .5% m/o/m and 5.8% y/o/y. We’ll see how many hours per week was worked but for perspective, CPI for February is expected to print up 7.9% y/o/y and is out next Thursday.
The economic pain of the invasion will of course be most intense in Europe with the spiking cost of energy being the obvious hit. The Dutch TTF natural gas price on a closing basis has today exceeded the December peak. Eating too is that much more expensive. Wheat as of this writing is now up 59% this week alone.
After seeing a ray of light with the possibility of the ECB ending its NIRP policy, in effect since 2014, the European banks are suffering anew, because of the exposure of some to Russian, a broader economic slowdown to come and now little chance the ECB hikes rates this year. The Euro STOXX bank stock index is down today for the 13th trading day in the last 16 and by 28% in this time frame. About 80% of capital raising in the Eurozone is done via its banks and why NIRP was such a bad idea, now going on 8 years.
Dutch TTF Natural Gas Price
Wheat
You’ve heard me talk positively on gold for way too long but today it’s again kissing the $1950 per ounce level. That’s the highest since January 2021 and my bullish stance is even more intact.
Gold
Said here many times for a while how global the inflation pressures are, South Korea said its February CPI rose 3.7% y/o/y, with a core rate up by 3.2%, both 2 tenths more than expected. That core rate increase is a 10 yr high. CPI in Thailand was higher by 5.3% in January vs the estimate of up 4%. The core rate was more muted, up by 1.8% but almost 3 times the forecast.
South Korea Core CPI y/o/y
There was some January economic data in Europe today like French industrial production, German trade and retail sales for the region but talk about rear view mirror numbers that aren’t worth analyzing in light of the changed world order.
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.