US jobs may provide near-term market guidance – Standard Chartered

Research Team at Standard Chartered suggests that the week ahead will bring the important US employment report for March.

Key Quotes

“After the Fed’s dovish hike and increasing doubts over the ability of Trump’s administration to push through his reflation policies, the health of the labour market may provide nearterm market guidance. The meeting between President Trump and President Xi on 6-7 April is another key event to watch out for.” 

“We expect another solid employment report. We forecast non-farm payrolls (NFP) at 175k (February: 235k). The unemployment rate may drop further to 4.6%. This would be another sign that the US labour market is at full employment. Wages – which are not as good as the Fed would like – will be watched closely, as the Fed scrutinises the figures to gauge the pace of rate hikes. We expect the y/y gain to remain firm at 2.8% y/y.”

“We continue to expect the next rate hike in June. The FOMC minutes (midweek) are unlikely to bring much new information as several Fed officials have already given speeches in recent days. The discussion about the balance sheet will be examined closely; we see the end of QE reinvestment happening in Q1-2018.”