Wage data could be the main driver inside the US jobs report
The United States economy is set to release the Non-farm payrolls job report for the month of March this week, with investors intensely focused on the wage data inside the report. February’s Non-farm payrolls headline number underwhelmed investors, while the falling US unemployment and improving wage situation inside the America economy pointed to an ever-tightening labor market.
The overall pick-up in US wages during February was the strongest recorded in nearly a decade as fewer workers became available to fill vacancies inside the U.S jobs market. Typically, when employees are unable to fill positions they start to raise wages in the hope that they are able to attract workers and also retain talent.
Economists will be closely watching the average earnings component of last month’s job report to see if a new trend is emerging inside the American labor market. The U.S and global incomes have been squeezed hard since the financial crisis of 2008; markets are likely to cheer another strong wage pick-up this week, with the greenback and equities likely to benefit the most.
Top tier economic data from the United States economy has been mixed since the last Non-farm payrolls job report, with the Federal Reserve’s preferred gauge of inflation, core PCE, missing expectation alongside weaker-than-expected US retail sales data. Weaker than expected consumption and depressed inflation is a phenomenon the Federal Reserve is likely to address at their next meeting.
This week, the official U.S manufacturing PMI weakened to its lowest level since 2017, while the ISM manufacturing survey outpaced most economists forecasts. Global PMI data also improved, with the Chinese and UK economies both outpacing expectations, while weak manufacturing data inside Europe persisted, causing traders to move into the greenback and the sell the euro currency.
EUR/USD Daily Mountain Chart | Source: ActivTrader
The EUR/USD had its weakest monthly price close since June 2017 last month, as the bearish fundamentals surrounding Europe weighed on the pair. Technical selling is expected to increase below the 1.1170 level, with major support found at the 1.1130 and 1.1000 levels. Key weekly resistance is found at the 1.1250 and 1.1290 levels.
Written by Nathan Batchelor, External Analyst
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