Logo of Phnom Penh Post newspaper Phnom Penh Post - Friday’s US non-farm payrolls data to decide tapering measures

Friday’s US non-farm payrolls data to decide tapering measures

Content image - Phnom Penh Post
Analysis by Golden FX Link Capital’s head of fintech Naoto Arase.

Friday’s US non-farm payrolls data to decide tapering measures

The market this week is focusing on the release of May’s US non-farm payrolls data, which will affect the movement of the financial market and central banks’ decisions on quantitative easing measures.

With the spread of Covid-19, central banks have implemented bold quantitative easing measures to purchase a large number of government bonds and mortgage-backed securities to supply funds to the market and improve the economy.

This is preceded by lowering interest rates to almost zero – or a rate that cannot be lowered anymore – to make it easier to raise funds, expand production equipment and bolster business performance.

If the employment statistics have not improved this time, it is likely that central banks will stick to their current measures – to keep purchasing the same amount of government bonds and mortgage-backed securities.

However, if the economic indicators or the employment statistics are positive on Friday – if more people have found jobs – the central bank will employ the exit strategy of tapering (an economic term that refers to the reduction of purchases of financial assets through quantitative easing policies).

As tapering will be carried out faster, it will trigger the appreciation of the US dollar, which is the key currency, and create a scenario in which inversely correlated products such as gold, other currencies and commodities will be sold.

Conversely, interest rates will rise and the dollar will be bought.

So let’s pay attention to the release of the non-farm payrolls data this Friday and see if it will lead to tapering.

At the same time investors need to be careful, in particular, regarding a decline in the euro, the yen and the price of gold.

Content image - Phnom Penh Post

MOST VIEWED

  • Hong Kong firm done buying Coke Cambodia

    Swire Coca-Cola Ltd, a wholly-owned subsidiary of Hong Kong-listed Swire Pacific Ltd, on November 25 announced that it had completed the acquisition of The Coca-Cola Co’s bottling business in Cambodia, as part of its ambitions to expand into the Southeast Asian market. Swire Coca-Cola affirmed

  • Cambodia's Bokator now officially in World Heritage List

    UNESCO has officially inscribed Cambodia’s “Kun Lbokator”, commonly known as Bokator, on the World Heritage List, according to Minister of Culture and Fine Arts Phoeurng Sackona in her brief report to Prime Minister Hun Sen on the night of November 29. Her report, which was

  • NagaWorld union leader arrested at airport after Australia trip

    Chhim Sithar, head of the Labour Rights Supported Union of Khmer Employees at NagaWorld integrated casino resort, was arrested on November 26 at Phnom Penh International Airport and placed in pre-trial detention after returning from a 12-day trip to Australia. Phnom Penh Municipal Court Investigating Judge

  • Sub-Decree approves $30M for mine clearance

    The Cambodian government established the ‘Mine-Free Cambodia 2025 Foundation’, and released an initial budget of $30 million. Based on the progress of the foundation in 2023, 2024 and 2025, more funds will be added from the national budget and other sources. In a sub-decree signed by Prime Minister Hun Sen

  • Two senior GDP officials defect to CPP

    Two senior officials of the Grassroots Democratic Party (GDP) have asked to join the Cambodian People’s Party (CPP), after apparently failing to forge a political alliance in the run-up to the 2023 general election. Yang Saing Koma, chairman of the GDP board, and Lek Sothear,

  • Cambodia's poverty cut in half from 2009 to 2019: World Bank report

    A report published by the World Bank on November 28 states that Cambodia’s national poverty rate fell by almost half between 2009 and 2019, but the Covid-19 pandemic recently reversed some of the poverty reduction progress. Cambodia’s poverty rate dropped from 33.8 to 17.8 per cent over the 10