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Market attention shifts to US CPI & response to US employment statistics is limited
Results of US non-farm payroll also continue rate hike expectations Last Friday's strong US employment statistics results clarified the robust movement of the US labor market.
“Market attention shifts to US CPI & response to US employment statistics is limited”
Results of US non-farm payroll also continue rate hike expectations Last Friday’s strong US employment statistics results clarified the robust movement of the US labor market, easing recession concerns that had been increasing against the backdrop of weak results on the ISM Economic Index.
The US non-farm payroll for March increased by 236,000, slightly below market expectations, but the unemployment rate unexpectedly improved to 3.5%.
Although there was no change in average hourly wages compared to the previous month, it slowed down slightly compared to the same month last year.
After two consecutive months of employment slowdown, the cooling of the labor market is evident, but it is insufficient to change the US rate hike policy for May.
Despite the possibility of a 0.25% rate hike next month increasing after the release of US employment statistics, rate hike expectations in the market remain at 2/3.
Therefore, the US Consumer Price Index for March, which will be announced this Wednesday, is expected to receive significant attention.
Although a significant decrease is expected in the US Consumer Price Index for March, the significant decrease forecast compared to the same month last year is due to the previous year’s surge in energy prices.
Therefore, it can be said that the FRB places greater emphasis on the results in the service sector than on the results compared to the same month last year.
Furthermore, it can be said that a result that falls below the expected US Consumer Price Index is unlikely to lead to a change in the rate hike policy the following month.
Stock market has a quiet start before US corporate earnings season The important issue is whether the FRB will stop raising rates after May and the possibility of a US recession is being speculated.
Data indicating a crisis relief has also been released regarding financial instability.
Deposits to US banks at the end of March increased and the emergency lending facility from the FRB last week has also decreased slightly.
However, the slowdown in employment and new orders in the ISM Economic Index, which indicates future prospects, is a cause for concern.
For a while, there seems to be a sense of uncertainty in the stock market.
On this Friday, the earnings season will begin with the results of major US banks, and in the short term, the attention of the stock market is focused on the first quarter earnings season.
So far, there is no change in expectations for a rate cut this year, but unexpectedly good earnings results may cause stock prices to rise amid the impact of bank turmoil on bonds.
There was no significant movement in the US stock futures index last Friday, and today is expected to start near last week’s closing price.
However, due to the Easter holiday, the stock market is expected to have lower trading volume than usual.
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