As another exciting week across financial markets draws to a close, attention shifts from the circus that is UK politics, to our friends in the US where the latest jobs report will provide a snapshot of the economy’s health.
This week has been dominated by all things Brexit, as well as a theme which has taken many by surprise. The rebound in global manufacturing and services data has kept economists and pundits guessing as to the direction the world economy heads from here. China’s impressive numbers were backed up by some solid US figures while Europe saw mild rebounds, even though some regions, such as Germany, remained within contraction territory.
Today sees focus back on the US economy as the latest jobs report is set for release at lunchtime. Non-farm payrolls data has lost its significance in recent years as the US economy continues to perform well and lead the world forward. However, since the Federal Reserve took a complete U-turn at the start of this year, shifting to a dovish stance from previously hawkish, the report will offer more importance for future monetary policy. The US central bank confirmed they believe interest rates will not rise again this year but, if the economy continues to outperform and inflation increases, they may find themselves forced to do so. This would have significant implications for an already strong, and arguably overbought, US dollar.
Consensus is for 170K new jobs to have been added in the month of March with the unemployment rate holding steady at 3.8%. As usual, large emphasis will be placed on the average hourly earnings metric for signs of wage inflation. The report will cross the wires at 13:30 and could have a meaningful impact across FX markets. Please speak to your Cornhill contact should you require any price levels monitored.
We’re happy to confirm next week will see focus return back to UK politics & Brexit… enjoy the weekend!
Written by Viv Savani. 8:56am, April 5th 2019
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