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30 Mar 2015
Look at US wage growth for more accurate rate guidance – MP
FXStreet (Barcelona) - With Fed becoming data-dependent the US jobs report is highly awaited, but to get a clearer picture for rate hike, Dean Popplewell, Director of Currency Analysis at MarketPulse, suggests that the wage growth proponent of the report might be better indicator than payrolls.
Key Quotes
“Capital Markets will probably need to take their interest rate timing clues from this Friday’s U.S NFP report. Ever since Ms. Yellen began the process of weaning investors off Central Bank dependence, and nudging the market towards fundamental data reliance, the U.S jobs report will be taking on much more significance.”
“Especially since the U.S economy has of late been exhibiting signs of a slowdown, seemingly due to excessive cold weather. Many are looking for this past winter’s cold snap to have finally taken a modest bite out of NFP (Expected +247k vs. +295k, unemployment rate unchanged at +5.5%).”
“If that does not happen, it could reinforce how strong the underlying U.S labor market truly is, and will have money-market traders pricing in an earlier rate hike.”
“Investors should remain weary of any weather related anomalies”
“For a more accurate rate guidance, look to the wage growth proponent of the report. Until now, there has been very little sign that a tighter labor market condition is supporting wage growth.”
Key Quotes
“Capital Markets will probably need to take their interest rate timing clues from this Friday’s U.S NFP report. Ever since Ms. Yellen began the process of weaning investors off Central Bank dependence, and nudging the market towards fundamental data reliance, the U.S jobs report will be taking on much more significance.”
“Especially since the U.S economy has of late been exhibiting signs of a slowdown, seemingly due to excessive cold weather. Many are looking for this past winter’s cold snap to have finally taken a modest bite out of NFP (Expected +247k vs. +295k, unemployment rate unchanged at +5.5%).”
“If that does not happen, it could reinforce how strong the underlying U.S labor market truly is, and will have money-market traders pricing in an earlier rate hike.”
“Investors should remain weary of any weather related anomalies”
“For a more accurate rate guidance, look to the wage growth proponent of the report. Until now, there has been very little sign that a tighter labor market condition is supporting wage growth.”