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Post ECB, pre payrolls

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The ECB delivered what economists broadly expected, but less than the market expected. When will markets learn that central banks are run by economists? We believe the ECB is finished with easing, and the economic reaction to this move is limited.
  • US labour market data today is unlikely to sway the Fed. Data has become less accurate and more prone to revision. Some in markets or the media may get overexcited by today's report, but the economists of the Fed know to take the big picture.
  • The US labour market is certainly giving some indications of division. Low skilled labour remains slack, with little pay bargaining strength. The change this year has been the improved position of semi-skilled labour and pay increases there.
  • German manufacturing orders data was better than expected (this has a bearing on perceptions of the Euro area). Japanese labour earnings growth remains lacklustre, weighted down by limited bonus payments.