DOW JONES, NIKKEI 225, WEEKLY OUTLOOK:
- Dow Jones, S&P 500 and Nasdaq 100 closed +0.52%, +1.18%, and +1.82% respectively last week
- US nonfarm payrolls hit 916k in March, blowing past expectations as the service sector rebounded
- The Nikkei 225 index may trade higher. Australian, HK and Chinese markets are closed for a holiday
Nonfarm Payrolls, FOMC Minutes, RBA Interest Rate, Asia-Pacific Week-Ahead:
Wall Street equities may extend higher after a long weekend as nonfarm payrolls data released on Friday smashed market expectations. The S&P 500 index closed at an all-time high on Thursday as reflation hopes boosted risk appetite and the tech sector continued to regain lost ground. The Nasdaq 100 index surged 1.82% and arrived at a six-week high. A much stronger-than-expected jobs report may further boost risk sentiment and support a rally across Asia-Pacific equities this week.
The March nonfarm payrolls data came in at 916k, compared to a baseline forecast of 647k. This marks the strongest gain in seven months. February’s reading was revised up to 468k from 379k, showing continuous improvement in the job market with the help of vaccine progress. A robust reading was mainly attributed to a surge in leisure and hospitality (+280k), bars and restaurants (+176k) as well as construction jobs (+110k). The rapid healing of the labor market from the second pandemic wave may reinforce reflation optimism and lead to a stronger US Dollar.
This week, FOMC meeting minutes will be closely eyed, but traders may also take the latest job data into consideration when trying to predict the Fed’s future interest rate path. A faster-than-expected economic recovery in the US may prevent the central bank from easing further, and the rollout of US$ 1.9 trillion fiscal spending may further boost growth.
US Non-farm Payrolls – March 2021