Friday was a major holiday (Good Friday), and therefore the markets were thin. Many futures markets closed early for the session, although BLS employment figures were released during the day. ISM Services PMI will be released today. USD/JPY continues to flirt with the all-important 160 JPY area.
- The Bureau of Labor Statistics released the latest figures on employment in the US on Friday, with the main takeaways being:
- The Average Hourly Earnings m/m release came out at 0.2%, lower than the expected 0.3%. A slightly negative number, but this still suggests that earnings are rising slightly, allowing for more inflationary pressure via retail spending.
- Non-Farm Employment Change figures came in at 178,000 jobs added, much more than the expected 65,000. However, the previous month was revised from -92,000 to -133,000. This suggests that the jobs market in the US remains very bumpy, but employment can still be found. Again, this should be thought of as another potential inflationary pressure in the US.
- The Unemployment Rate was 4.3%, less than the expected 4.4%. This shows that there are still plenty of Americans working and therefore spending. This should continue to be a bit of an issue for the Fed, since people keep buying, as seen recently in the Retail Sales figures.
- With most major economies closed for Easter Monday, it is just the Americans that will have an announcement, in the form of ISM Services PMI. The announcement is forecast for a reading of 54.8, with anything above that being yet another thing for the Fed to watch, as the inflation picture in the US remains problematic.
- War in the Middle East continues to be a major focus, with energy inflation via Crude Oil and Natural Gas becoming a very real problem for most of the world. Asian markets are particularly vulnerable in the immediate timeframe, as physical deliveries are starting to reach the point where missing deliveries are starting to come to fruition. Of note, there is concern being expressed by some that the Chinese may ban exports of refined fuel to the rest of the region.
- OPEC+ agreed over the weekend to expand production by an additional 206,000 barrels a day when the Strait of Hormuz reopens. While not an immediate factor, once peace becomes a reality, oil may see a rapid return to balance.
- The USD/JPY pair continues to test the 160 JPY level, an area that has been important all the way back to 1990. A breech of the 160.40 JPY level could lead to a massive, short squeeze in many JPY-denominated pairs. The Japanese yen will continue be followed closely by Forex traders around the world.