Market Movers
Today's key event is the US non-farm payroll report (see US labour market monitor: slower job growth not an obstacle for the Fed ). Over the past three months, the US economy has added, on average, 221,000 jobs per month - a pace that cannot be sustained in an economy where potential labour force growth is only around 150,000 per month and even lower if we do not see an increase in the labour participation rate. Our models suggest a slowdown in job growth in September to 180,000 and even though this is slower than the recent trend, it is still enough, if sustained, to put additional downward pressure on the unemployment rate. In our view, job growth will need to drop below the 160,000 mark before the Fed will see it as an obstacle to starting the tightening cycle later this year. In terms of the unemployment rate, we expect the rate to stay unchanged at 5.1% in September but to head below 5% by year-end.
The Boston Fed's conference on Macroprudential Monetary Policy is kicked off today and will run through Saturday. Fed members Eric Rosengren, William Dudley, Loretta Mester and Narayana Kocherlakota are among other scheduled speakers.
In Scandi markets focus will be on Norwegian unemployment and Danish FX reserve figures due for release today, see Scandi Markets.
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