Next week in the US there is a busy week. Negotiations to avoid a new shutdown, the FOMC meeting and the NFP report. Analysts at Danske Bank do not expect the FOMC meeting to bring any new signals.
Key Quotes:
“Next week, the job reports, due out on Friday, is the most important release. We think average hourly earnings have risen +0.25% m/m in January, which means a fall in the annual growth rate from 3.2% to 3.1% y/y. We expect the unemployment rate to come in higher due to the shutdown, as we believe the household survey from which the unemployment rate is derived is likely to consider the furloughed workers as unemployed. For total payrolls, furloughed workers are counted as employed; however, due to the shutdown there might also be some noise in the total payroll number. We will keep an eye on private payrolls, which are unaffected.”
“Also brings the FOMC meeting. Recently, we have got more dovish signals from the Fed supporting it being on hold for now and likely until the June meeting. From now on Jerome Powell will hold a press conference after each meeting and as the Fed has not updated its projections, we do not expect any new signals.”
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