The May U.S. non-farm payroll report on Friday may be a much less volatile affair than last month, when shock news of 288,000 new jobs topped even the most optimistic views.
This time, there is more certainty around a less spectacular but still solid outcome, based on an analysis of forecasts from the most accurate economists in Reuters polls on recent U.S. data.
What is striking is how many analysts and money market traders alike think the net result will be neutral at best.
There was no more talk of “forward guidance”, but the guidance was pretty clear: no change to the view, on track for a first rate hike in a very gradual series, starting around a year from now. Nothing to see here.
Given that Draghi has now openly pegged the outlook for monetary policy at least partly to the exchange rate, the prospect of both short-term and long-term investors buying the euro is a worrying obstacle for policy.
What is also becoming increasingly evident is that it wouldn’t do much good.
There is no serious risk of deflation in the euro zone, nearly every one of them says, and from here onward, euro zone inflation will only be higher than the March trough of 0.5 percent.
This time last year, analysts and investors were nearly unanimous in their expectation for a whole lot of nothing from Britain’s economy which, after a valiant leap higher from a spectacularly successful 2012 Olympic Games hosted in London, was back to just bumping along.
Now the UK is looking to clock the best sprint in the G7 for the first three months of a year – and by a wide margin.
Ask three different economists and you’ll get three different answers.
While that’s not anything new, the different ways some analysts have spun the surprise — one of the biggest on U.S. data in many months — is exceptionally far from anything resembling a consensus.
New home sales – a leading indicator for housing – plummeted by 14.5 percent in March, totally wrong-footing the Reuters consensus of forecasters. They were expecting modest improvement after a decidedly poor winter for the U.S. economy on nearly all measures.
The February jobs report will be no exception to this U.S. season of climactic howling.
Much ink has been spilled over the past several months over when the Bank of England will eventually raise interest rates from a record low of 0.5 percent, and if they’ll do it before the Federal Reserve does. The pound is trading near a five-year high against a basket of currencies as a result.
BoE Governor Mark Carney and other Monetary Policy Committee members have tried to remind the public and businesses at every chance they are given that a rate rise is still a way off – likely at least a year – and that when it’s time for the central bank to lift rates, it will do so gradually.