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Basking in the warm glow of US payrolls

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  • It is US employment report Friday, an event which puts a spring in the step of every economist as they trudge to work. With a labour market economist heading the Fed, labour market data is back in fashion. We see 200,000 non farm payrolls (as the weather was not that chilly in the survey week).
  • US labour market data is not likely to deter the Fed from its scaling back of quantitative policy. It would take a fairly seismic event to divert the course of the quantitative policy auto pilot (quantitative policy is more about financial conditions. Issues around labour markets, spare capacity etc are an issue for monetary policy).
  • The ECB press conference was a little more hawkish than markets expected, but essentially the ECB is saying further policy is data dependent (and easing risks have risen over recent weeks). The March publication of staff economists' projections could be important in driving policy.
  • There are industrial production data from Europe and the UK (how Spain is faring in the wake of lower unit labour costs is interesting). Australia's RBA issued its quarterly statement, essentially validating the neutral stance to policy from earlier this week.

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