Follow Paul Donovan

Post payrolls

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The US labour market data was weak (at least in part) and the markets have become convinced that this reduces the probability of a Fed rate increase. This shows that markets a) do not listen to the Fed and b) do not notice the volatility of revisions.
  • There were some signs of strength in the data too (a sharp decline in underemployment, for instance). The trend of the numbers is consistent with an economy at or very close to full employment.
  • Sentiment data from the service sectors are due from both sides of the Atlantic. This is subject to the same caveats and warnings that the manufacturing data is subject to, but is generally expected to show a reasonably robust level of expansion.
  • Stronger sentiment data makes Mr Draghi's pursuit of more quantitative policy more difficult to achieve – monetary policy generally being viewed as the remedy for low inflation in the Euro area. Extending quantitative measures beyond September 2016 remains a risk.