All eyes on NFP report

US initial jobless claims were at 221,000 in the week to March 30, up from 212,000 the previous week and higher than the predicted 214,000. This was the highest reading for the measure since January, but the four-week moving average, while moving higher, is still lower than the pre-pandemic average as the labour market remains resilient. JOLTs and ADP figures both surprised to the upside earlier this week and all eyes will now be on the NFP report due out later today where the consensus prediction is for a net gain of 214,000, which has climbed from 203,000 at the start of the week.

Fed officials have been commenting over the past 24 hours, with some different viewpoints being aired. Minneapolis Fed president Neel Kashkari, not a voting member, has cautioned that it’s possible that the Fed won’t cut rates at all this year if jobs and growth figures continue to come in strong. On the other hand, however, Loretta Mester has said that she does ‘anticipate we’ll be in a position to lower Fed Funds rate later this year.’

Today’s Economic Data and Events

8:30 India RBI repurchase rate. Forecast: 6.5%

16:30 US change in nonfarm payrolls, March. Forecast: 213,000

16:30 US unemployment rate, March. Forecast: 3.8%

Fixed Income

• USTs rallied yesterday as yields fell across the curve. The 2yr yield fell 2bps to 4.6474% while the 10yr fell 4bps to 4.3094%.
• In Europe, 10yr bunds fell 3bps to 2.360%, while the 10yr gilt yield ended the day 4bps lower at 4.021%.

FX

• The dollar index closed lower against its basket of peers for the third day running on Thursday, down 0.1%.
• JPY was a gainer against the greenback, adding 0.2% to 151.34, and is continuing to gain this morning as BoJ Governor Kazuo Ueda hinted at the possibility of another hike from the central bank in the second half of the year.
• Sterling was a notable loser against the dollar, closing down 0.1% to 1.2642, while EUR closed flat at 1.0837.

Equities

• US equities closed lower yesterday, weighed down by some hawkish commentary from Fed officials. The S&P 500 closed 1.2% lower, while the Dow Jones and the NASDAQ both ended the day down 1.4%.
• Locally, the DFM added 0.2% and the ADX closed 0.3% higher. In Saudi Arabia the Tadawul ended up 0.6%.

Commodities

• Oil prices continued to climb yesterday, with Brent futures passing through the 90 mark for the first time since October. The benchmark closed up 1.5% to close at USD 90.65/b, while WTI added 1.4% to close at USD 86.59/b.