Us non-farm payrolls growth was unexpectedly weak in April, with employers finding it difficult to recruit, hampering the momentum of the labour market. Data released by the labor department on Friday showed that non-farm payrolls rose 266000 in April, far below the median forecast by economists for an increase of 1 million. The March figure was revised down to an increase of 770000. The unemployment rate rose slightly to 6.1%. After the data, gold prices soared to a nearly three-month high, Treasury yields plunged to a two-month low, inflation expectations fell and the dollar weakened sharply.

Standard Chartered Bank said the latest non-farm payrolls data were so bad that investors might think it was an accident and that it did not reflect accurately the state of the labour market. However, the weaker-than-expected data supported the Fed's cautious tone. The key is to judge whether the non-farm payrolls data are accurate or whether the strong conditions seen elsewhere are more accurate. But we know that the Fed will think that this data confirms their caution, so the idea that more stimulus measures will last longer will boost asset markets and make the dollar bearish across the board.

This week, the United States will release a series of important data, including April CPI, PPI, retail sales, first request, etc., as well as UK GDP and China CPI data. Most of the macro data will be concentrated in the second half of the week. On Wednesday, CPI, will release initial jobless claims on Thursday and PPI, will release retail sales and industrial production data on Friday.

Wednesday's inflation data will be closely watched to see how price pressures develop. Especially when Yellen, the US Treasury secretary and former Fed chairman, hinted earlier this week that a "modest" rate hike would be necessary if inflation began to become a problem. Yellen later retracted the comment, saying, "this is just my prediction or suggestion," but a weak signal has been sent and triggered volatility in the market. According to Friday's non-farm payrolls report, interest rate increases are likely to be further delayed unless inflation is overheated.

James Knightley, chief international economist at Dutch international group (ING), said: "Consumer price inflation is likely to soar to nearly 4 per cent because prices in a vibrant reopened economy are in sharp contrast to those of 12 months ago, when the economy was blocked and companies cut prices sharply in order to generate cash flow." As the Fed insists that any inflation expected in the US this year will be temporary, the surge in prices will perpetuate the debate about inflation.

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