- For Easter Monday, financial markets in France and Germany are closed
- The euro is being affected by higher odds of a Fed hike
- Eurozone releases retail sales data and investor confidence on Tuesday
The solid nonfarm payrolls provide a boost to the US dollar
Due to the US employment report, Friday’s strong US data, the US dollar is now higher than any major currencies, including the euro. Nonfarm payrolls were the star of the show in March, coming in at 236,000. This couldn’t keep up with the prior release, which was upwardly revised to 326,000, but kept close to the market consensus of 340,000.
Friday’s “goldilocks” employment report (strong job gains with limited wage growth) points to a surprisingly resilient job market, despite relentless rate hikes from the Fed. Although the labour market has been cooling, markets still believe that it is too hot for Fed. The Fed needs to see more employment data in order to slow down inflation. The Fed will likely need to increase rates more often before it can end its current tightening cycle. The odds of a 25 basis point rate hike in May have jumped to 68%, according to the CME Group, versus around 50% prior to Friday’s employment report.
Tuesday will see the eurozone get back to work with…