8 May 2017

Bassanese Bites: Global Optimism – Week beginning: 08 May 2017

In an otherwise lacklustre week, risk markets nonetheless ended positively following a reassuringly firm US payrolls report on Friday.  Importantly, while US employment rose a better than expected 211k in April (market 190K), and the unemployment rate dropped to a new low for this expansion of 4.4%, wage growth remained remarkably benign. Annual growth in average hourly earnings eased back to 2.5% (from a recent peak of 2.8% in February).  With the Fed shrugging of as “likely transitory” the weak Q1 US GDP result at its policy meeting last week, the market now regards it as virtually certain the Fed will hike rates at its next meeting on June 13-14….

 

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