US inflation expectations remain pressured near weekly low, NFP eyed

US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, extends losses from Friday towards the late August low while declining to 2.32% at the latest for Thursday. In doing so, the risk barometer fades Tuesday’s bounce while extending the previous day’s pullback from 2.34%.

It’s worth mentioning that the gauge of sentiment prints a lower high formation since July 29, suggesting further hardships for the US Federal Reserve (Fed) tapering.

Also favoring the rejection of the Fed’s taper tantrum is the latest trend of the downbeat early signals for today’s US Nonfarm Payrolls (NFP), the key data to determine the Fed’s future moves.

On Thursday, the Initial Jobless Claims and Continuing Claims eased from the market consensus for the week ended on August 27. The four-week average of Initial Jobless Claims also declined from 366.75K to 355K. Previously, the ADP Employment Change and the employment component of the US ISM Manufacturing PMI both signaled a contraction in the US jobs and marked the need for further easy money policies.

While portraying the mood, S&P 500 Futures remain sluggish even as the Wall Street benchmarks closed mildly positive on Thursday.

Moving on, the US jobs report for August will be the key catalyst for the market after Fed Chairman Jerome Powell’s cautious optimism at the Jackson Hole Symposium.

Read: Nonfarm Payrolls August Preview: Sine qua non for the taper