Friday preview: Non-farm payrolls in the spotlight

With no major corporate earnings due, all eyes will be on the latest US non-farm payrolls report on Friday, with another strong showing expected.

Consensus expectations are for a 490,000 increase in payrolls in March from February but Oxford Economics is more optimistic, pencilling in a jump of 550,000. It expects the unemployment rate to have ticked down to 3.7% from 3.8%, which would be a new cycle low.

Lead US economist Lydia Boussour said: "A key focus will be on average hourly earnings and whether the surprisingly soft February print was a blip or an early signal. In our view, the February reading likely understated wage growth.

"With labour market metrics still pointing to an extremely tight job market, we expect a robust 0.4% gain in average hourly earnings lifting wage growth 0.4ppts higher to a hefty 5.5% pace - the same pace as in January and the fastest since May 2020."

Boussour said the strong March jobs report will all but reinforce the Federal Reserve's strong resolve to rein in inflation and bolster the case for a 50 basis points rate hike at its meeting on May 4.

"While the near-term labour market outlook remains bright, we expect job creation will settle into a slower pace later this year as the economy feels the pinch from soaring inflation and tighter financial conditions," he said.

On Wednesday, the latest data from ADP showed that private sector employment in the US rose a touch more than expected in March.

Employment increased by 455,000 from February, versus expectations for a 450,000 jump. Meanwhile, the total of jobs added in February was revised from 475,000 to 486,000.

Small businesses with fewer than 50 employees added 90,000 jobs, while medium businesses with between 50 and 499 employees added 188,000. Large businesses with more than 500 employees created 177,000 jobs.

The services sector added 377,000, while the goods-producing sector saw a 79,000 increase. Within services, leisure and hospitality saw the biggest jump at 161,000.

Friday 01 April

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INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Construction Spending (US) (15:00)

ISM Manufacturing (US) (15:00)

Non-Farm Payrolls (US) (13:30)

PMI Manufacturing (GER) (08:55)

PMI Manufacturing (EU) (09:00)

PMI Manufacturing (US) (14:45)

Retail Sales (GER) (07:00)

Unemployment Rate (US) (13:30)

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