GBBEF - Week Ahead: Strong U.S. Jobs Data Failed To Sustain Dollar Rally Can The March CPI Do Better?
2024-04-06 08:40:00 ET
Summary
- The March US employment data were stronger than expected and lend support to the re-acceleration hypothesis and an extension of US exceptionalism.
- The week ahead features the US inflation gauges, the European Central Bank, and the Bank of Canada meetings.
- Federal Reserve officials need greater confidence that inflation is on a sustainable path toward its 2% average target.
- The peso solidified its hold as the world's strongest currency this year. It rose to new nine-year highs ahead of the weekend.
The March US employment data were stronger than expected and lend support to the re-acceleration hypothesis and an extension of US exceptionalism. In Q1 24, nonfarm payrolls rose by an average of 276k. It was the strongest quarter in a year and compares with an average monthly job gain of about 251k in 2023. The unemployment rate slipped as the household survey jumped around 500k after falling in the previous two months. The workweek increased, and the participation rate rose. Reasons to dismiss the employment data are becoming thinner. The economy is still growing faster than what the Fed regards as the long-term non-inflation pace (1.8%). The US two-year yield rose 12 bp and approached the high for the year (4.75%), and the 10-year yield set a new high (4.43%) and settled up 19 bp. Still, the US dollar closed softer against most of the G10 currencies last week but the Swiss franc, Japanese yen, and the Canadian dollar. Several commodities, including gold, oil, and copper, rose sharply, which seems incongruent with higher rates and a stronger dollar....
Week Ahead: Strong U.S. Jobs Data Failed To Sustain Dollar Rally, Can The March CPI Do Better?