Oil breaks US$100, Wall Street retreats and bond yields rise, inflation is becoming the market’s biggest risk again Global markets are starting Thursday in a more defensive position. Brent crude has broken above US$100 a barrel , U.S. Treasury yields are pushing higher, and Wall Street fell for a third straight session as investors reassess whether central banks may need to keep tightening rather than easing. For Malaysian investors, the key chain today is increasingly clear: Oil → inflation → interest rates → bond yields → USD/MYR → Bursa valuations. 30-second market snapshot Market / Asset Latest 🇺🇸 S&P 500 7,636.36, -0.48% 🇺🇸 Dow Jones 52,380.66, -0.77% 🇺🇸 Nasdaq 26,253.34, -0.64% 🇲🇾 FBM KLCI 1,714.34, virtually flat 💵 USD/MYR ~4.06 🇺🇸 U.S. 10Y Treasury ~4.84% 🇺🇸 U.S. 2Y Treasury ~4.42% 🥇 Gold ~US$4,396/oz 🛢️ Brent crude US$101.21/bbl 🛢️ WTI crude US$96.05/bbl ₿ Bitcoin ~US$79,300 🇯🇵 Nikkei ~64,760, -0.6% this morning Brent jumped about 3.4% Wednesda...
Canada's economy experienced an unexpected setback in June, losing a net 1,400 jobs, contrary to analysts' expectations of a 22,500 job gain. This brought the unemployment rate to a 29-month high of 6.4%, exceeding the anticipated 6.3%.
Key Points and Highlights:
- Unexpected Job Loss: Canada lost a net 1,400 jobs in June.
- Rising Unemployment: The unemployment rate rose to 6.4%, higher than the forecasted 6.3%.
- Highest Since 2022: The jobless rate is at its highest since January 2022, excluding pandemic years.
- Youth Unemployment: Youth unemployment increased by 0.9 percentage points to 13.5%, the highest since September 2014, outside of the pandemic period.
- Wage Growth: Average hourly wage growth for permanent employees accelerated to 5.6% annually, the fastest since December.
- Labor Market Cooling: Bank of Canada Governor Tiff Macklem noted the labor market had cooled, suggesting economic growth and job creation could continue without significantly impacting the 2% inflation target.
- Currency and Bond Yields: The Canadian dollar firmed slightly, and yields on two-year government bonds dropped by 8.6 basis points.
- Interest Rate Speculation: Weak job figures increased the likelihood of a July interest rate cut, with market bets for a cut rising to 55%.
Employment Trends:
- Full-time vs. Part-time: Jobs were shed in full-time work, while part-time positions saw gains.
- Sector Employment: The goods sector added 12,600 jobs, primarily in agriculture, while the services sector lost 14,100 jobs, with significant losses in transportation, warehousing, and information, culture, and recreation.
Future Outlook:
The Bank of Canada lowered its key policy rate for the first time in over four years in June and indicated more cuts might follow if inflation continues to cool. The next rate announcement is scheduled for July 24, a week after the release of the next inflation data on July 16.
In June, the total number of unemployed people in Canada rose to 1.4 million, marking a 3.1% increase from the previous month.
The unexpected job loss and rising unemployment highlight ongoing challenges in Canada's labor market, despite some positive indicators such as wage growth. The situation calls for careful monitoring of economic trends and potential policy adjustments to support recovery and stability.
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