Jobs data ease fears of US slowdown

Following the eagerly awaited Non-Farm payrolls on Friday investors have scaled back expectations of an interest rate cut in the US. According to rate futures the possibility of a rate cut in July has dropped from 66 per cent to 28 per cent.

The NFP figures showed an increase of 97,000 jobs in February against a market average forecast of 95,000. Although the figure was the smallest rise since January 2005, the main focus of attention was the revised figures for December and January.

December Non-farm figures were revised from 206,000 up to 226,000 and January was revised up from 111,000 to 146,000, this also took the unemployment rate down slightly to 4.5% from 4.6%.

After last weeks activity in US indicators, this week thins out some what. The main points of interest will be Retail sales on Tuesday, followed by US PPI on Thursday and then CPI and Michigan sentiment on Friday.

After the 25bp increase in Euro Zone base rate, this week will see few economic indicators in Euroland. Only the Zew report (Tuesday) stands as a possible market mover, although Labor costs may provide a small amount interest, following Trichet’s remarks.
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This morning in the UK we have seen the release of the RICS housing market survey showing a fifteenth consecutive monthly increase. A lack of property on the market has driven up house prices, with surveyors reporting that the number of unsold properties on their books has declined to the lowest since August 2004.

Also of interest in the UK this week will be UK unemployment and Average earnings both due for release on Wednesday.

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