Market Wrap – Fed Speak and jobs

The main mover during the US session so far has been the US dollar currency as it react to Fed speaker Collins, weekly jobs data, and a negative tone in the market due to falling stocks.

Earlier today Fed member Collins said that any upcoming rate hikes from the US central bank will be determined by the incoming data, which is pretty much as tight lipped as you can get.

Later this market looks to comments from Fed member Waller who is a member of the Board of Governors at the Fed. Dr Waller had served as executive vice president and director of research at the Federal Reserve Bank of St. Louis prior to his Fed board appointment, and who is a known rate hawk.

The number of Americans filing for unemployment benefits fell by 2,000 from the previous week to 190,000 on the week ending February 25th, below market expectations of 195,000.

The latest value remained close to the nine-month low of 183,000 hits at the end of January, giving further evidence that the US labour market remains tight in part to reduced labour force participation.

This could force employers to raise wages to attract and keep staff, adding to further inflationary pressure in the world’s largest economy. The four-week moving average, which removes week-to-week volatility, rose by 1,750 to 193,000.

During the US session the Bank of England’s Chief economist spoke and his comments added to pressure to the pound as he said “GDP is projected to fall slightly over the coming quarters.”

He added that “Survey indicators that have become available since the publication of the forecast have surprised to the upside, suggesting that the current momentum in economic activity may be slightly stronger than anticipated.”

On inflation he said “CPI inflation is projected to fall to below the 2% target by the end of the forecast horizon” and he noted that “The labour market is tighter than unemployment rate would suggest.”