Markets were mostly steady on Friday after the US employment data came in mixed, but broadly in line with expectations. The Nonfarm payrolls rose by 196,000 jobs in March, above expectations of 175K, while the figure for February was revised up to 33K, from the previously reported 20K. The headline unemployment rate held steady at 3.8%, while the average hourly wages grew at 0.1% mm and at 3.2%yy, a slight slowdown from February, and below expectations of 0.3%/3.4%.
There was really very little reaction, although the US$ and stocks were mildly stronger, while the metals were pretty much unchanged and US yields were slightly lower. The real action was once again in oil, where Brent reached $70.00 ($70.40; +1.6%) for the first time since 9 November, and WTI closed at 63.26 (+1.8%). This came about despite the weekly US Baker Hughes rig count showing the first surge in oil rigs in seven weeks, +15, to 831 rigs, and the technical target for WTI remains at $70.00.
Monday and Tuesday are going to be fairly quiet in terms of data but things warm up on Wednesday with the ECB Interest Rate Decision and Press Conference coming ahead of the US CPI and the FOMC Minutes, in what will be a busy session.
With regards to the ECB decision, it is expected that the bank will leave the main refinancing rate, the marginal lending rate and the deposit rate unchanged at 0.0%, 0.25% and -0.40%, respectively. Looking ahead, given that inflation in the EU shows little sign of improvement, it may be that the ECB could further extend its forward guidance by pledging that low interest rates will stay in place for longer, beyond the end of 2019 and into the first half of 2020. We shall see, but that being the case, it would put added downside pressure on the Euro.
Thursday will also be busy, with inflation data to come from China, German and also from the US (PPI). Friday could be pretty hectic too as it will be the Brexit deadline date, albeit that this is pretty fluid right now as no one seems to have a clue what is going on. Also on Friday we will get the China Trade Balance, and then late in the session the Michigan Consumer Sentiment Index. Have a good week.
Economic data highlights will include:
Mon: Australian ANZ Job Ads, Japan Eco Watchers Survey, BOJs Kuroda Speech, German Trade Balance, EU Sentix Investor Confidence Survey, US Factory Orders
Tue: Australian Home Loans, US NFIB Business Optimism Index, API Weekly Crude Oil Stock Inventory, Fed’s Clarida Speech
Wed: Japan Machinery Orders, Machine Tool Orders, BOJs Kuroda Speech, China New Loans, RBA’s Debelle Speech, UK Manufacturing/Industrial Production, Trade Balance, Goods Trade Balance, GDP, ECB Interest Rate Decision/ Statement/Press Conference, European Council Meeting, US CPI, Monthly Budget Statement, FOMC Minutes, EIA Crude Oil Stocks Weekly Change
Thur: NZ Food Price Index, Australian Consumer Inflation Expectation, Investment Lending for Homes, China CPI, RBA’s Debelle Speech, German CPI/HICP, US PPI, Jobless Claims
Fri: Brexit Deadline Date, Australian Financial Stability Report, China Trade Balance, EU Industrial Production, US Import/Export Index, Michigan Preliminary Consumer Sentiment Index ,
Market moves, in brief:
FX: DXY 97.36 (+0.07%)
Bonds: US10Y; 2.495% (-1.10%), German 10Y; +0.005% (187%), UK 10Y; 1.117% (+2.80%), Australian 10Y; 1.913% (0.47%), NZ 10Y; 2.005% (0.00 %), China 10Y; 3.238% (0.00%)
Stock Indices: DJI; +0.15%, S+P; +0.46%, NASDAQ; +0.51%, EUStoxx50; +0.29%, FTSE100; +0.61%, Shanghai Composite; +0.94%,
Metals: Gold $1292 oz (-0.02%), Silver $15.11 oz (-0.28%), Copper $2.89 lb (-0.93%), Iron Ore $91.81 per tonne (-0.78%),
Oil: WTI $63.26 pb (1.8%)
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