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Markets were boosted on Friday night by US employment data which absolutely smashed expectations. There were 313,000 jobs added in February — easily beating an already strong forecast of 205,000.
And while more people found work, the data showed wage growth moderated with a 2.6% rise — down from the 2.9% gain in January which set off a round of panic in markets about the prospect of rising inflation and higher interest rates.
The resulting “Goldilocks” outcome — a stocks-friendly combination of steady growth and low inflation — gave rise to heavy demand for risk assets to end the week.
Bonds were sold off and the S&P500 closed 1.74% higher on the day, while the Aussie dollar was well-bid across the board and finished the week at 0.7848 US cents.
Risk appetite was also helped by the geo-political backdrop amid reports that plans are underway for US President Trump to meet with North Korean leader Kim Jong Un.
The US dollar index traded flat, as the greenback fell against most major currencies but was propped up by a move out of the safe-haven Japanese yen.
After a big week of headline releases to start the month, it’s a quieter week ahead on the domestic data front. NAB’s monthly business survey will be the highlight, and there’s a number of RBA speakers scheduled throughout the week.
Looking abroad, key data will be led by US inflation figures on Tuesday night.
Australia
The NAB’s survey for February (Tuesday, 11:30am AEDT) will give an update on business conditions and confidence among Australian companies — which have consistently been tracking at record highs in recent months.
Also on Tuesday there’s housing finance data from the ABS for January — where the focus will be on changes to growth in investor loans after they declined in December.
Among the RBA speakers scheduled for the week, Michele Bullock (Assistant Governor — Financial System) will give a speech at a payments conference on Tuesday morning.
And Deputy Governor Guy Debelle is scheduled to speak at a conference on financial risk in Sydney on Friday morning (9:45am AEDT).
International
Key data will be led by US CPI inflation figures on Tuesday night, with the market forecast for monthly core inflation to rise by 0.2%, leaving the annual rate at 1.9% — still below the US Fed’s 2-3% target band.
On Wednesday during Asian trade China has industrial production and retail sales data for February, and later that night the US also has retail trade data along with PPI inflation figures.
Also on Wednesday night ECB President Mario Draghi will give a speech at a conference in Frankfurt.
On Thursday in the Asian region there’s New Zealand Q4 GDP, with key data on Thursday night focused on the US. There’s monthly jobless claims — which have been consistently low in line with strong demand for labour — along with the Philadelphia Fed’s monthly business survey.
Then on Friday night the Eurozone gets a final reading of February inflation, while key data in the US will be led by new housing starts and industrial production numbers.
Have a great week.
