In observance of the Holy Week, the Philippine News Agency’s online news service will be off on March 29, Good Friday, and March 30, Black Saturday. Normal operations will resume on March 31, Easter Sunday.

— The Editors

Global markets await US job reports after tumultuous week

ANKARA – After a tumultuous week and massive losses in September, the global markets await the US job reports next week as they may shape the US Federal Reserve's monetary policies in the coming months.
 
Increasing inflation pressures on world economies, rising energy prices, uncertainties in Asia amid Chinese real estate developer Evergrande, and the Fed signaling to begin tapering -- the process of scaling back its $120 billion worth of monthly bond purchases -- have recently created high volatility in global markets.
 
US stock markets ended September with their worst monthly loss of 2021 so far. 
 
While the Dow Jones fell 4.3 percent last month, the S&P 500 declined 4.8 percent for its largest drop since March 2020. The Nasdaq plummeted 5.3 percent -- its worst September in a decade.
 
European indices also had massive losses, with the STOXX index plummeting 3.8 percent, while Germany's DAX 30 and France's CAC 40 losing around 3.4 percent each, according to data compiled by Anadolu Agency.
 
Energy prices soar
 
There has been a lot of uncertainty about when central banks of major economies would raise interest rates amid rising inflation and energy prices. Still, the high level of unemployment and weak labor market conditions continue to be significant obstacles.
 
Oil prices have recently climbed to their highest level in three years as the international benchmark Brent crude price hit $80.75 per barrel on Tuesday -- its highest level since October 2018.
 
The Organization of the Petroleum Exporting Countries (OPEC) will hold its ministerial meeting on Monday. 
 
The global oil market expects the group to discuss increasing oil production to meet the post-pandemic period's surging demand caused by normalization.
 
Natural gas prices in Europe hit a fresh record of 100 euros ($116) this week, posing a risk against economic recovery and heating before the winter season.
 
On the labor market front, Euro area unemployment stood at 7.5 percent in August 2021, with EU unemployment at 6.8 percent, according to Eurostat, the statistical office of the EU.
 
The unemployment rate in the US stood at 5.2 percent in August after the world's largest economy could only add 235,000 jobs that month, according to the latest figures of the US Labor Department.
 
Job openings in the US, on the other hand, hit a new record of 10.9 million in July, suggesting that there is an uneven recovery from the coronavirus pandemic in the US economy.
 
US private payrolls for September will be announced on Wednesday at 8:15 a.m. EDT (1215 GMT), which is expected to come at 430,000 --higher than 374,000 in August if realized.
 
Nonfarm payrolls for September will be released on Friday at 8:30 a.m. EDT (1215 GMT). 
 
The jobs data that the Fed watches very closely is estimated to come at 460,000, after posting a weak increase of only 235,000 in August.
 
Timeline of Fed tapering
 
The US central bank is awaiting a solid gain in jobs report to begin its tapering process, which could either start by November or December latest.
 
Fed Chair Jerome Powell said last week tapering might conclude by mid-2022, which gives the bank around eight months to end its $120 billion monthly asset purchases if it cuts them by $15 billion each month.
 
The central bank also signaled on September 22 after its two-day meeting that it projects the first rate hike to come in 2022 and expects to make four more interest rate increases in 2023, instead of its earlier estimate of two made on June 16.
 
Those expectations have pushed the US dollar index, which includes a basket of currencies like the euro, the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, to climb as high as 94.50 on September 30 -- its highest level since September 2020.
 
The yield on 10-year US Treasury notes also hit 1.567 percent on September 28, marking its highest level since June 6 this year.
 
The VIX (volatility index), known as the fear index, climbed above the critical level of 20 after jumping 24 percent in a single session on Tuesday.
 
High inflation to persist
 
Inflation is expected to remain high around the world throughout the first half of 2022, at least until labor markets show some sign of recovery.
 
The European Central Bank (ECB) and the US Federal Reserve are awaiting improvement in employment data before raising interest rates that could come at the end of 2022 by the earliest, given the current weak labor market conditions.
 
ECB President Christine Lagarde said on September 16 that she expects the eurozone economy to recover quicker than expected from the coronavirus pandemic amid fast vaccination.
 
Lagarde said Wednesday energy prices are expected to decline in the first half of 2022.
 
However, Powell said production bottlenecks and supply chain problems would continue next year, holding up inflation longer than earlier estimates.
 
He also hinted that the Fed may raise interest rates to bring inflation under control if prices increase to unsustainable levels.
 
Powell added he hopes the central bank would not need to balance inflation and rate hikes, which he referred to as "the difficult trade-off of having the two goals in tension." (Anadolu)
 
 

Comments