Ladies and Gentlemen,
It has been a very busy start to the financial year, the
stock markets have had a rough ride, the DAX is down 7% YTD and the S&P is
below the pivotal 1990 level.
Risk off has been the theme in the FX market, until the
correction overnight, has the sentiment turned ahead of the Non-Farm Payrolls?
The Non-Farm Payroll number will be announced at 13:30 GMT
the consensus is for a 200k number following on from 211k in December, keep a
keen eye out for the unemployment rate which is currently 5% and the average
earnings increase, which is released at the same time. Reference to wage
inflation and levels of employment where mentioned at the ‘Lift off’ press
conference.
Why is this number so important? The market is trying to
work out the pace of rate hikes in 2016, it is important to remember that the
FED only has 8 meeting in a year. Will the hiking cycle be gradual or more
aggressive? Fed Chair Yellen mentioned at her press conference that ‘future
policy actions will obviously depend on how the economy evolves’ stressing that
unemployment and inflation figures are factors that guide the Fed in arriving
at rate hike decisions.
The Federal Reserve official publish their forecasts for the
central bank’s key interest rate on a chart known as the ‘dot plot’. The dots
has 4 hikes whereas Fed funds only has 3 who will be correct?
This year has already been touted as the year of ‘Doom Gloom
and lack of Boom’, and i am looking forward to more positive 2016.
Good Luck
No comments:
Post a Comment