Market movers today
Today, ISM manufacturing for March is due out in the US. ISM manufacturing has soared over the past couple of months, emphasising that there is progress in manufacturing. In the same period, we have seen a divergence between ISM and PMI manufacturing emerge. Based on this, one would argue that ISM manufacturing could be in for a fall. However, regional manufacturing indices continued rising in March. Thus, there are mixed signals concerning the March ISM figures. We estimate that the ISM manufacturing fell back slightly to 56.0 in March. Today also brings a number of speeches by FOMC members and we will also get the minutes from the 14-15 March FOMC meeting on Wednesday. We will in particular look for discussions on the Fed's desire to begin shrinking its balance sheet, as Fed Chair Janet Yellen said at the press conference that the FOMC members discussed it at the meeting.
The absolute highlight of the week in the US will be the labour market report for March on Friday. The labour market has been in good shape over the past two months and we expect this trend to continue. We estimate a total of 160,000 new jobs were created in March of which the service sector provided 160,000 and manufacturing 15,000. We furthermore expect the unemployment rate remained at 4.7% after last month's decrease. As a warm-up for the labour market report, ADP employment for March is due out on Wednesday. Although not a perfect predictor, ADP tends to give a relatively good idea of what to expect from the official jobs report.
In the euro area, it is today time for PMIs for both for single countries and the eurozone. In general, consensus is looking for a consolidation at an already high level. If anything, the risk is also skewed to the downside in Europe as in the US. The unemployment figure for February is also due for release today. From its January level of 9.6%, we estimate unemployment fell to 9.5%, continuing its steady decline since 2013. Business sentiment suggests that unemployment will continue declining as the PMI employment indicator, especially within services, showed strength in January and February.
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