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6 Feb 2015
Pick up in wages might push US rates higher – KBC
FXStreet (Barcelona) - According to KBC Bank, besides the NFP print, even the wage growth could influence the US rates market, with a probable boost in wages expected to push rates higher.
Key Quotes
“Ahead of the payrolls, bond trading will likely be dull. We see risks on the downside of expectations.”
“This week, core bonds corrected lower despite Greek stumbling blocks/volatility. This suggest that rate markets are positioned for a stronger outcome, creating room for disappointment in case of a (big; >50k) miss. A test of the 131‐05+ high is then likely as it would reinforce investors positioning for a delay beyond Summer of a first Fed hike.”
“If payrolls are near consensus (230k) or stronger, the US Note future could test the 128‐23+ support (potential neckline double top).”
“Apart from the headline number, wage growth could also influence the market reaction. A pick‐up in wages in the “missing link” in the US labour market recovery and could push US rates higher.”
Key Quotes
“Ahead of the payrolls, bond trading will likely be dull. We see risks on the downside of expectations.”
“This week, core bonds corrected lower despite Greek stumbling blocks/volatility. This suggest that rate markets are positioned for a stronger outcome, creating room for disappointment in case of a (big; >50k) miss. A test of the 131‐05+ high is then likely as it would reinforce investors positioning for a delay beyond Summer of a first Fed hike.”
“If payrolls are near consensus (230k) or stronger, the US Note future could test the 128‐23+ support (potential neckline double top).”
“Apart from the headline number, wage growth could also influence the market reaction. A pick‐up in wages in the “missing link” in the US labour market recovery and could push US rates higher.”