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2 Mar 2015
US NFP this Friday to raise the prospect of a Fed rate hike – BTMU
FXStreet (Barcelona) - According to Derek Halpenny, European Head of GMR at Bank of Tokyo-Mitsubishi UFJ, Friday’s NFP will likely come out stronger and raise the prospect of a rate hike by the Fed, and further adds that a delay in the rate hike will not undermine USD strength, as global easing will keep the dollar supported.
Key Quotes
“On Friday, the NFP data is likely to confirm another solid month of job gains that will leave open the prospect of the Federal Reserve raising the federal funds rate for the first time since 2006.”
“One key area of the report will of course be the growth in average earnings. The 0.5% gain last month is expected to be followed by a 0.2% gain and our internal estimate based on other measures of labour market spare capacity continue to point to an acceleration in annual wage growth toward 3.0% in the second half of the year.”
“Wages and Salaries in the Employment Cost Index report is showing a pick-up is underway with the annualised growth rate in the second half of last year at 2.5%.”
“With gasoline and energy prices lower, the boost to real incomes will be key for supporting personal consumption and giving the Fed the confidence to believe economic growth has become more sustainable.”
“The employment reports are always important – but the next few reports will be crucial in determining whether market rates have to adjust sharply higher or the FOMC has to adjust its message to the markets on the timing of the first rate increase.”
“Crucially though, while a delay may undermine the dollar, the dollar will remain supported by the much more active easing taking place internationally.”
Key Quotes
“On Friday, the NFP data is likely to confirm another solid month of job gains that will leave open the prospect of the Federal Reserve raising the federal funds rate for the first time since 2006.”
“One key area of the report will of course be the growth in average earnings. The 0.5% gain last month is expected to be followed by a 0.2% gain and our internal estimate based on other measures of labour market spare capacity continue to point to an acceleration in annual wage growth toward 3.0% in the second half of the year.”
“Wages and Salaries in the Employment Cost Index report is showing a pick-up is underway with the annualised growth rate in the second half of last year at 2.5%.”
“With gasoline and energy prices lower, the boost to real incomes will be key for supporting personal consumption and giving the Fed the confidence to believe economic growth has become more sustainable.”
“The employment reports are always important – but the next few reports will be crucial in determining whether market rates have to adjust sharply higher or the FOMC has to adjust its message to the markets on the timing of the first rate increase.”
“Crucially though, while a delay may undermine the dollar, the dollar will remain supported by the much more active easing taking place internationally.”