US Earnings and Jobs Data Hit a Sweet Spot for Markets

The US Nonfarm Payrolls data released on Friday showed a strong increase in job creation and, combined with the lower than expected increase in Hourly Earnings, sent the markets into risk-on mode. This was a complete reversal of the previous month’s reaction to this data series when positive sentiment evaporated as fears of inflation and interest rate hikes took over. This time, data indicated that the labour market, despite being the tightest it has been in decades, is not putting pressure on wages and, therefore, keeping inflation low. US stock markets roared higher with the Dow up 440 points or 1.77%, the NASDAQ up 1.79% and S&P 500 up 1.74%. Treasury Yield moved higher, as the expectation of 4 rate hikes increases but at a gradual pace. The US dollar was weaker against the AUD, NZD, CAD and GBP but managed to gain against the JPY. German Current Account n.s.a. (Jan) was €22.0B v an expected €17.2B against a previous €27.8B. Exports (MoM) (Jan) were -0.5% v an expected 0.3%, against 0.3% previously. Imports (MoM) (Jan) were -0.5% v an expected 0.0%, against 1.4% previously. Trade Balance s.a. (Jan) was €21.3B v an expected €21.1B, against a prior €21.4B. The trade balance is showing a slight fall but is inside normal range, with imports down and exports steady. EURUSD fell from 1.23209 to 1.23108. UK Industrial Production (YoY) (Jan) was 1.6% v an expected 1.8%, against a previous 0.0%. Manufacturing Production (MoM) (Jan) was 0.1% v an expected 0.2%, against 0.3% previously. This figure had been less volatile during much of 2017, with readings staying positive but close to zero. Industrial Production (MoM) (Jan) was 1.3% v an expected to be 1.5%, against -1.3% previously. Seasonally, there is generally a downturn in this figure, with a drop in negative territory early in the New Year. This month’s number shows strong performance and is one of the best March readings on record, even if it did miss expectations. Manufacturing Production (YoY) (Jan) was 2.7% v an expected 2.8%, against 1.4% previously. GBPUSD moved between a high of 1.38152 and a low of 1.38014 because of this data release. UK NIESR GDP Estimate (3M) (Feb) was as expected at 0.3%, against 0.5% prior, which was revised down to 0.4%. The data point has been moving closer to 0.0% since hitting a high of 1.0% in May 2014. However, it has managed to remain positive in that time, with a 0.4% average. GBPUSD reached a high of 1.38407 but fell to a low of 1.38426 after this data release. US Non-Farm Payrolls (Feb) beat the consensus, coming in at 313K against an expected 200K, from a prior 200K, which was revised up to 239K. The Unemployment Rate (Feb) was 4.1% v an expected 4.0%, with a prior of 4.1%. This measures the percentage of the total workforce unemployed and actively seeking employment during February. Average Hourly Earnings (YoY) (Feb) was 2.6% v an expected 2.8%, against 2.9% previously, which was revised down to …