Analysts at Deutsche Bank notes that the US employment report dominates the agenda and the consensus is for a 191k payrolls reading which follows a much softer than expected 157k last month.
Key Quotes
“Our US economists are slightly more cautious and have pegged a 185k forecast which is more conservative than their models imply largely because payrolls have missed consensus in the month of August for seven consecutive years which is a fairly telling stat. Indeed the average miss is 46k in the last seven Augusts.”
“To be fair that probably dampens the importance of today’s data but the earnings numbers will still be a big focus. The market is expecting a +0.2% mom average hourly earnings number which should be enough to keep the annual rate at +2.7% yoy.”
“Our economists actually expect a slightly stronger +0.3% earnings print which would push the annual rate up a tenth to +2.8% and just slightly behind September 2017’s hurricane-distorted post-recession high.”
“Meanwhile our colleagues expect the unemployment rate to hold steady at 3.9% although the market expects a one-tenth fall to 3.8%.”
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