©Reuters
By Noreen Burke
Investing.com — Next week will bring the all-important monthly US jobs report as stock markets head into the second quarter, OPEC meets and central banks in Australia and New Zealand announce their latest rate decisions.
- Pay slips outside of agriculture
Market watchers will turn to Friday’s nonfarm payrolls report for a fresh update on the health of a job market that has remained resilient over the past year amid a spate of rate hikes by the Federal Reserve.
Economists expect the US economy added jobs in March after rising 311k in February. Average hourly wages are forecast to have risen by annually, which would be the slowest rate since July 2021.
The March payroll report will be the last before the Fed’s approaching May, with investors pondering whether policymakers will hike rates one last time. A move above 200k in job creation should support expectations for a 25 basis point rate hike.
Fed officials have indicated that they expect interest rates to stay at current levels for the rest of this year in a bid to fight inflation.
- Other data, Fedspeak
Ahead of Friday’s important jobs report, the economic calendar includes February data on Tuesday and March data on Wednesday.
ISM Purchasing Managers Surveys and Industry Activity are released on Monday and Wednesday respectively.
Several Fed policymakers will make appearances throughout the week, including Cleveland Fed Chair Loretta, St. Louis Fed Chair James and Fed Governor Lisa Cook.
Fed officials have indicated that they expect interest rates to remain at current levels for the remainder of this year in a bid to bring inflation back to the bank’s 2% target. But while inflationary pressures remain elevated, officials must also consider the impact of higher interest rates on financial stability following the recent turmoil in the banking sector.
- stock markets
US equity markets posted solid gains in the first quarter despite a sharp sell-off in bank stocks after the collapse of two regional banks sparked fears of a broader financial crisis.
It rose 16.8% for its biggest quarterly percentage gain since 2020. It rose 7%, rebounding after falling nearly 20% in 2022 and ending the quarter up 0.4%.
Cautious investors say these gains make stocks more vulnerable to an economic downturn that turmoil in the banking sector may have brought closer.
The extent to which stocks have priced in a possible recession — and whether the economy will experience one — has been a bone of contention on Wall Street.
“The answer is definitely no, the market is not priced in for a recession at all,” said Hans Olsen, chief investment officer at Fiduciary Trust Co. For equities, “this means we could have some very nasty surprises in the coming quarters.”
- OPEC meeting
OPEC+ is likely to stick to its existing agreement to cut oil production at a meeting on Monday, Reuters reported after oil prices rebounded after falling to 15-month lows.
Oil has rallied towards $80 a barrel after falling to nearly $70 on March 20 as fears of a global banking crisis ease and an export halt from Iraq’s Kurdistan region cuts supplies.
OPEC+, which consists of the Organization of Petroleum Exporting Countries and Allies led by Russia, is scheduled to hold a virtual meeting of its ministerial oversight body, which includes Russia and Saudi Arabia, on Monday.
After these talks, the next full OPEC+ meeting will not take place until June.
Falling oil prices are a concern for most OPEC+ members as their economies are heavily dependent on oil revenues.
- RBA, RBNZ rate decisions
He is due to meet on Tuesday with a decision on whether interest rates should be raised or kept on a razor’s edge.
Last week’s data showed that Australian inflation slowed to an 8-month yoy low in February, prompting investors to all but rule out chances of a 25 basis point rate hike.
RBA Governor Philip Lowe said the central bank was closer to pausing rate hikes as monetary policy is now in a hawkish zone, and suggested a halt could come as early as April depending on the data.
Meanwhile, markets are still betting on another 25 basis point rate hike from Wednesday’s meeting.
–Reuters contributed to this report
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