More than payrolls
- The US employment report looms large on the horizon, and as quantitative policy fades into its close issues of spare capacity in the labour market are going to be looked to as guides to how early and how quickly the Fed will choose to raise Fed funds.
- No one indicator should be latched onto as a guide to spare capacity - instead a broad range need to be monitored. We are below consensus in our payrolls forecast at 180,000, for calendar effect reasons. Unemployment is seen falling to 6.6%. Employment participation and earnings will be noteworthy.
- Euro manufacturing sentiment data comes out in the form of a PMI, with the normal caveats about the tendency of such data to overreact. Nevertheless a modest acceleration of activity is expected by the market.
- The Bank of England deputy governor was sounding a note of concern on UK house prices without going overboard on the topic yesterday. CIPs construction data is due today. The Japanese publish unemployment numbers.
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