Today (03.04.2020) the data from the US labor market was published. The plunged in the non-farm payrolls in the US in March was so huge that it definitely exceeded market expectations.
In March, the NFP reading showed a decrease in employment by 701,000. jobs. The market consensus assumed that it would decrease by 100,000. This is the first decline in job creation since September 2010, but also the largest decrease since 2008. Of course, services have suffered the most. A significant decline in employment also occurred in health care and social assistance, business services, retail trade, and construction. However, a more complete picture of the damage caused by the pandemic will only be visible in the April data, because the NFP report excludes the last two weeks of March when the number of unemployed increased by nearly 10 million. Hence, revisions of this reading will be relevant. However, the markets reacted very calmly, we did not observe significant fluctuations in the US dollar. It should be added that the unemployment rate in the US increased from 3.5 percent up to 4.4 percent.
Key events of the week (6-12.04.2020)
The topic about fighting a pandemic may probably overshadow the other events, but nevertheless, once again, the initial jobless claims data from the US will be electrifying. If they are still such high numbers, then according to various estimates, the unemployment rate in the US may rise by up to 15 percent. The US data will also show an inflation reading for March, where due to a significant drop in oil prices the indicator may be well below the previous value of 2.4 percent.
For the commodity market, including oil, information on the potential Monday video conference of OPEC countries and cartel allies may be important. On Friday, the Azerbaijani Ministry of Energy announced that a virtual meeting of OPEC producers and non-OPEC partners, the alliance called OPEC +, was scheduled for April 6, according to the RIA news agency. OPEC, however, did not confirm these reports. Nevertheless, it is worth remembering that such a thread appeared because the oil market is currently very unstable.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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