The market wants higher unemployment. What will the week bring?

The last four months on the oil market were associated with a dynamic increase in raw material prices, which in the current situation is an absolutely key issue for investors. More expensive oil means higher prices at gas stations, and this is a strongly pro-inflation factor that is certainly not in favor of Fed. Will the US labor market finally show signs of weakness?

Inflation in the US will definitely increase

By releasing strategic oil reserves last year, Joe Biden deprived himself of a geopolitical "ace in the hole", which the OPEC+ countries are now ruthlessly exploiting. At the end of September, a barrel of WTI crude oil was priced at around USD 90, but analysts almost agree that the price of black gold can easily exceed the barrier of USD 100 per barrel.

The market knows perfectly well that the inflation level in the United States will increase in the coming months - if only for statistical reasons. Way Petroleum however, it may magnify this effect, undermining the Fed's current efforts to fight inflation. Therefore, the attention of market participants is focused on the American labor market - because if demand in the economy is stifled by worse employment conditions, the rebound in inflation levels may be small.

With strong upward pressure on bond yields, some market participants could hope for a slowdown in balance sheet reduction programs, which are increasingly taking their toll on stock market participants. However, looking at the market in the short term, some indicators suggest the possibility of a local bottom. But will this actually happen?

In today's webinar:

• Oil Rising and What's Next?
• What do macro data tell us?
• What's next for stock markets?

About the host

Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.

CFDs are complex instruments and involve a high risk of a quick loss of cash due to leverage. 76% of retail investor accounts record monetary losses as a result of trading CFDs with this CFD provider. Consider whether you understand how CFDs work and whether you can afford the high risk of losing your money.