Bassanese Bites: Oil prices surge – October 10 2022
Week in review
Last week can be divided into two halves. In the first half, weaker than expected US economic manufacturing data saw Wall Street bond and equity traders get excited about yet another potential ‘pivot’ by the Federal Reserve. Alas, the week ended with still strong US labour market data and unrelenting hawkishness from Fed officials – such that pivot hopes were quickly quashed. September US jobs growth was stronger than expected (+263k vs market +250K) with the unemployment rate sinking to 3.5% and annual growth in average hourly earnings remaining firm at 5.0%. While the focus remains on hopes of an easing in consumer price inflation, the other burning issue in the US is that the labour market remains too hot – meaning economic growth and earnings growth must slow by a lot more than we’ve seen to date.
