Research Team at Investec, suggests that as we venture into the first full week of April and the second quarter of the year, it’s worth taking note of Friday’s solid non-farm payrolls figure, with the US showing a 200k+ increase.
“The above consensus extra 215k jobs was mainly due to private payrolls in the service sector, as per trend. Average hourly earnings increased more than expected to 2.3% yoy (exp 2.2%) and February data was revised up to 2.3% as well, helping shine a light on the strong jobs market and rising inflation threat. So a solid jobs report that goes a long way to keeping the Fed on track for a mid-year rate rise, as is the Investec Economics Team's forecast, despite the dovish tone still coming from Fed Chair Janet Yellen.
The Dollar strengthened against most currencies after the release, although negative-rate 'funding currencies' such as the Euro and Yen were winners in what become a risk-off style move. Yes, rather than purely blanket US Dollar buying, currencies markets saw low yield and safe haven currencies outperform.
Looking at the week ahead, in the US we have the minutes for the March FOMC meeting on Wednesday evening and on Thursday evening Janet Yellen is again speaking, with many wondering if she will continue last week's dovish tone after the solid jobs report.”
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