USD: Jobs data and Fed signals guide volatility – BNY

BNY’s Head of Markets Macro Strategy Bob Savage highlights that U.S. ISM surveys, PMIs and the jobs report will be central for Dollar and rates pricing this week. The bank notes that the focus on jobs as a key factor in sustaining FOMC rate-cut expectations continues to drive market volatility and cross-asset value shifts.

US data and Fed speakers steer Dollar

"With the jobs report Friday, we’ll also get the usual precursors, including ADP on Wednesday and Challenger job cuts data on Thursday. Several large firms have recently announced layoffs, and we will be watching to see whether these cuts begin to show up in the data."

"We remain concerned about the lack of breadth in job creation, as well as its generally moribund pace. Last month produced a strong headline number for NFPs at 130k, but almost all job creation was in the noncyclical health care sector."

"ISM manufacturing and services PMIs come out on Monday and Wednesday. Regional PMIs last week suggest that services could wane, while manufacturing indicators have been more equivocal."

"U.S. ISM surveys and NFPs will be pivotal in shaping Fed expectations, particularly as markets debate stable versus restrictive policy into Q2."

"Fed speakers scheduled before the communications blackout Friday include three FOMC voting members: New York Fed President John Williams, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan. Speakers have been on the hawkish side lately, and last week’s PPI indicated inflation is still warm."

"The March Beige Book is also released Wednesday. Last cycle’s report was downbeat, and we’ll be keen to absorb qualitative data from the release. 

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)