Research Team at Deutsche Bank, suggests that the first day of this month is also a big one for markets with the US employment report for March the highlight this afternoon.
Key Quotes
“Current market expectations for nonfarm payrolls are sitting at 205k which compares to the 242k number we got back in February. The unemployment rate is expected to hold steady at 4.9% and average hourly earnings are expected to rise +0.2% mom during the month.
With all the chatter from recent Fed speakers and also Yellen on the importance of evidence of further signs in wage inflation it will be the key to keep an eye on the latter in particular.
Our US economists are a little more cautious ahead of today’s release and despite the trend like ADP reading, have a below consensus 175k forecast for payrolls. They note that this would have the effect of lifting the unemployment rate back to 5.0%, while they are also slightly less optimistic with regards to the earnings data (expect average hourly earnings growth of +0.1% mom). They note that their forecast for below-trend employment is consistent with their meagre Q1 real GDP growth projection of 0.5%.
Another interesting point they make is that they have noticed a recent tendency for the median consensus forecast for March to overestimate the initially-reported March payroll gain. In fact, they highlight that the median forecast for March has over-predicted the initial payroll figure in five out of the last six years.”
(Market News Provided by FXstreet)