The US Nonfarm Payrolls (Feb.) data that market participants were waiting for before the March 21-22 FOMC Meeting, released new job additions of 311K, higher than the forecast of 205K, but managed to fall far from the surprising January period of 504K. The Unemployment Rate (Feb.) also increased to 3.6% from the previous month’s 3.4%, in line with Initial Jobless Claims, which came out earlier at 211K, higher than the forecast and the previous week. Prior to that, labor data showing new job growth in the private sector as ADP Nonfarm Employment Change (Feb.) also showed an increase at 242K (higher than forecast & previous period). On the other hand, China released the largest Trade Balance Surplus in 5 years, but did not receive a positive reception from the market as their Exports and Imports turned out to show negative growth; hence, it was no surprise that their inflation fell from the forecast & previous period at 1% YoY.
This week’s outlook:
Market participants are on edge over the Silicon Valley Bank collapse, which is the biggest financial collapse since the 2008 financial crisis; worrying that the Fed’s campaign to fight inflation is revealing weaknesses in the financial system that will worsen if interest rate hikes continue. Complementing the crucial economic data for the March 21-22 FOMC Meeting decision makers, next Tuesday the US Inflation figure (Feb.) will be released, where economists expect inflation to ease to 6% YoY and 0.4% MoM (from 6.4% YoY & 0.5% MoM in the last position). The European Central Bank will set a 50 bps interest rate hike at Thursday’s central bank meeting, following the 3% they have raised since July in order to control the Eurozone Inflation rate which was still seen to heat up last month. Market participants also expect the ECB to raise another 50 bps at its May 4 meeting. The UK is set to set a state budget to help the country achieve 1.3% GDP growth for 2024, with the Bank of England expecting a minor contraction. From the Asian continent, the financial world awaits the release of the first Retail Sales & Industrial Production data of the year from China, which will give some insight into whether the economic growth target of 5% is achievable; after a weak 3% performance in 2022. While from Indonesia, Trade Balance (Feb.) figures will be the focus next Wednesday, before the interest rate decision is announced the following Thursday.
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