– The current US labor report is clear highlight of the week and can set the tone in the markets of the future, writes Erik Bruce in Friday’s report from Nordea Markets.
Following the weak GDP figures for Q2 is again uncertainty increased the strength of the US economy and whether we can expect an interest rate increase this year.
– Do we get right, and employment will increase by 185,000 and wage growth will be 2.6 per cent year on year, it will clearly indicate that the labor market continues to be tightened to whether the growth outlook is on the weak side. We will take as a support for our view of a rate hike from the Fed in December, turning Bruce fixed.
Nordea estimates are close to consensus as market reaction will probably be relatively cautious about Bruce gets right.
Although the market dishes little attention to figure, Nordea believes that it is important to follow the manufacturing production index for June which will be published today.
– Looking through the monthly volatility, it may seem as industrial production has stabilized after a sharp drop from the end of 2014. This applies even if today the June figures should correct something down. The industry is of the business sectors most affected by oil downturn and that it is now flattening out is a good sign, says Bruce.
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