NFP Data Set to Make Waves

April 05, 2024

NFP Data Set to Make Waves

  • USD mixed ahead of today’s US March non-farm payrolls (NFP). Canada also reports March labour market data.
  • BOJ Governor Ueda gives JPY a short-term boost. NOK is outperforming on higher crude oil prices.
  • India’s central bank delivered another hawkish hold. INR is up.

USD is mixed and a little bit above this week’s lows. US equity futures point to a modest rebound at the open following yesterday’s sell-off. 10-year Treasury yields are holding above 4.30%. Crude oil prices are firmer on fears of growing tensions between Iran and Israel.

More Fed officials urged patience before lowering rates which offered USD some support. Richmond Fed President Thomas Barkin (voter) remarked “given a strong labor market, we have time for the clouds to clear before beginning the process of toggling rates down”. And Minneapolis Fed President Neel Kashkari (non-voter) raised the possibility of no Fed funds rate cut “if inflation stalls” but also indicated he pencilled-in 2 cuts in 2024.

Nevertheless, Fed funds futures continue to keep a June rate cut well in play (70% priced-in) and a total of roughly 75bps of easing this year. We see scope for a reassessment in Fed funds rate expectations in favour of a firmer USD and higher Treasury yields. The Atlanta Fed GDPNowcast points to robust Q1 growth of 2.47% saar and the Chicago Fed financial conditions index is the loosest since January 2022.

Today’s non-farm payrolls report (8:30am New York) will be an important driver of US interest rate expectations. Non-farm payrolls are projected to rise 214k in March versus 275k in February. Risks are balance. ADP private sector jobs was higher than expected but jobless claims are rising, and layoff announcements jumped in March.

The US unemployment rate is expected to dip to 3.8% in March after rising 0.2pts to 3.9% in February. As Fed Governor Christopher Waller noted the jobless rate increase in February “was driven mostly by an outsized rise in the number of 16- to 24-year-olds counted as unemployed. Youth employment tends to be volatile, so this rate may drop back in the next few months and, if so, pull the overall unemployment rate back down as well”.

The pace of US wage growth, a key driver of core services CPI inflation, will also generate a lot of attention. Consensus is for average hourly earnings to rise by 0.3% m/m and slow at an annual pace of 4.1% in March from 4.3% in February.

Fed speakers today include: Boston Fed President Susan Collins (8:30am New York), Richmond Fed President Thomas Barkin (9:15am New York), Dallas Fed President Lorie Logan (11:00am New York), and Fed Governor Michelle Bowman (12:30pm New York).

USD/JPY fell by over 0.50% to an intra-day low around 150.80 following hawkish comments from BOJ Governor Ueda. Ueda cautioned he sees wage growth leading to higher consumer prices and signalled a weak yen could be another factor for rate hikes. Meanwhile, verbal defence on the yen continues as Japanese Finance Minister Suzuki and Prime Minister Kishida both warned against excessive yen moves. In our view, it’s only a matter of time before USD/JPY breaks higher because we anticipate a gradual BOJ tightening process and a more muted than currently priced-in Fed easing cycle.

USD/CAD is trading near the top of a two-month 1.3400-1.3600 range. Canada’s March labour force report is the domestic highlight (8:30am New York). Consensus sees a 25k rise in jobs vs. 40.7k in February, as well as the unemployment rate rising a tick to 5.9%. Recent labor market readings have been solid, validating the BOC’s warning in March that “it’s too early to loosen the restrictive policy.”

EUR/USD is struggling to sustain a break above its 200-day moving average (1.0833). Consumers in the Eurozone continue to hold back on spending. February retail sales volumes fell 0.5% m/m in February (consensus: -0.4%) after a flat print in January. In contrast, US real personal spending was up 0.4% in February. Bottom line: relative EU/US economic activity can further weigh on EUR/USD.

There was no new policy information from yesterday’s ECB March meeting Account. According to the Account the date of a first rate cut was “coming more clearly into view” and “the Governing Council would have significantly more data and information by the June meeting, especially on wage dynamics”. A June ECB rate cut is already fully priced-in.

USD/INR fell 0.15% to intra-day lows around 83.3000 after the India’s central bank (RBI) delivered another hawkish hold. As was widely expected, RBI left the policy rate at 6.50% and maintained its policy stance of “withdrawal of accommodation.” Importantly, there is no indication the RBI is prepared to loosen policy anytime soon as the vote was again 5-1 to keep rates on hold. Varma dissented for a second consecutive meeting in favor of lower rates.

Brown Brothers Harriman & Co. (“BBH”) may be used to reference the company as a whole and/or its various subsidiaries generally. This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries.This material is for general information and reference purposes only and does not constitute legal, tax or investment advice and is not intended as an offer to sell, or a solicitation to buy securities, services or investment products. Any reference to tax matters is not intended to be used, and may not be used, for purposes of avoiding penalties under the U.S. Internal Revenue Code, or other applicable tax regimes, or for promotion, marketing or recommendation to third parties. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed, and reliance should not be placed on the information presented. This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH. All trademarks and service marks included are the property of BBH or their respective owners.© Brown Brothers Harriman & Co. 2024. All rights reserved.

As of June 15, 2022 Internet Explorer 11 is not supported by

Important Information for Non-U.S. Residents

You are required to read the following important information, which, in conjunction with the Terms and Conditions, governs your use of this website. Your use of this website and its contents constitute your acceptance of this information and those Terms and Conditions. If you do not agree with this information and the Terms and Conditions, you should immediately cease use of this website. The contents of this website have not been prepared for the benefit of investors outside of the United States. This website is not intended as a solicitation of the purchase or sale of any security or other financial instrument or any investment management services for any investor who resides in a jurisdiction other than the United States1. As a general matter, Brown Brothers Harriman & Co. and its subsidiaries (“BBH”) is not licensed or registered to solicit prospective investors and offer investment advisory services in jurisdictions outside of the United States. The information on this website is not intended to be distributed to, directed at or used by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. Persons in respect of whom such prohibitions apply must not access the website.  Under certain circumstances, BBH may provide services to investors located outside of the United States in accordance with applicable law. The conditions under which such services may be provided will be analyzed on a case-by-case basis by BBH. BBH will only accept investors from such jurisdictions or countries where it has made a determination that such an arrangement or relationship is permissible under the laws of that jurisdiction or country. The existence of this website is not intended to be a substitute for the type of analysis described above and is not intended as a solicitation of or recommendation to any prospective investor, including those located outside of the United States. Certain BBH products or services may not be available in certain jurisdictions. By choosing to access this website from any location other than the United States, you accept full responsibility for compliance with all local laws. The website contains content that has been obtained from sources that BBH believes to be reliable as of the date presented; however, BBH cannot guarantee the accuracy of such content, assure its completeness, or warrant that such information will not be changed. The content contained herein is current as of the date of issuance and is subject to change without notice. The website’s content does not constitute investment advice and should not be used as the basis for any investment decision. There is no guarantee that any investment objectives, expectations, targets described in this website or the  performance or profitability of any investment will be achieved. You understand that investing in securities and other financial instruments involves risks that may affect the value of the securities and may result in losses, including the potential loss of the principal invested, and you assume and are able to bear all such risks.  In no event shall BBH or any other affiliated party be liable for any direct, incidental, special, consequential, indirect, lost profits, loss of business or data, or punitive damages arising out of your use of this website. By clicking accept, you confirm that you accept  to the above Important Information along with Terms and Conditions.

1BBH sponsors UCITS Funds registered in Luxembourg, in certain jurisdictions. For information on those funds, please see

captcha image

Type in the word seen on the picture

I am a current investor in another jurisdiction