Week Ahead: Fed and ECB Decisions Set the Stage for U.S. Payrolls
XM Group | Apr 28, 2023 07:08AM ET
Fed to play its final card
The US economic machine seems to be gathering momentum, with the latest business surveys pointing to a resurgence in demand and an acceleration in jobs growth entering the second quarter. Recession concerns have receded for now, especially after the banking stress calmed down.
Nonetheless, the bond market continues to scream that there is economic pain on the horizon, and even the Fed’s own research staff anticipated a “mild recession” later this year in its latest projections. The general sense among investors is that the downturn has merely been postponed, not canceled.
With the RBA moving to the sidelines, the main variables of the Australian dollar moving forward might be how global risk sentiment and commodity prices evolve. The same is true for the Canadian and New Zealand dollars, as those central banks have also paused their tightening cycles or are about to.
Those economies will both see the release of employment data next week. New Zealand’s jobs report for Q1 will hit the markets Thursday, ahead of the monthly numbers from Canada on Friday.
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