FXStreet (Barcelona) – Economists at Deutsche Bank, project that the April US labor market data release will be key for the Fed and the markets to ascertain the rate hike probability.
Key Quotes
“While the latest economic data have been a mixed bag for the economy— weak consumption/strong construction—the labor market outlook remains upbeat. The employment component of the manufacturing ISM recovered a bit compared to March (51.7 vs. 48.3) and sits at a four-month high.”
“As an aside, the manufacturing ISM survey was a bit better than expected in April, registering a 52.8 reading compared to 51.5 in March. If the current reading is sustained, the manufacturing ISM is consistent with real GDP growth in the 2% to 2.5% range—our forecast is 2.5%.”
“Looking ahead to this Friday, we continue to project a 275k gain in April nonfarm payrolls and a one-tenth decline in the unemployment rate to 5.3%. As always, depending on the outcome of the April ADP private employment survey (Wednesday), we will revisit our payroll forecast.”
“Remember this will be the last employment release Fed policymakers will have before the June 16-17 FOMC meeting, when the Fed will provide updated economic forecasts. If employment is sturdy, the financial markets and monetary policymakers will become more emboldened that the decline in Q1 real GDP was due largely to the weather and various quirks in the seasonal-adjustment procedures.”
(Market News Provided by FXstreet)