Tomorrow is Good Friday – a bank holiday as a big part of the advanced economies celebrate the Easter break. It is the first big holiday of the year, just in time to evaluate the first quarter’s performance and to plan for the second one.
Despite markets being closed and liquidity thin, the NFP report will be released tomorrow. After all, it is the first Friday of the new month, when the NFP report is due.
The market participants expect that the U.S. economy added 652k jobs in March and that the Unemployment Rate declined to 6%. While the expectations are high, the odds are that the numbers will beat expectations. Intermediary data points to a strong report, and so risk-on trades are supported on every dip.
Job Postings on Indeed Rose Above Pre-Pandemic Level
Indeed, one of the largest virtual job marketplaces just reported that job postings rose above pre-pandemic levels by about 13.5%. Manufacturing, warehouse, and pharmacy jobs are up more than 50% above pre-pandemic levels, telling the world how the pandemic shifted the top-performing sectors in the world’s largest economy.
In contrast, jobs in the hospitality and tourism sector are down 25% below the baseline scenario before the pandemic. It shows the further potential of the U.S. labor market, as the more the economy opens due to the increased vaccination pace, the faster the two sectors will recover and start contributing to the recovery.
Heading into April, the market expects March data to beat expectations on all fronts. Let’s not forget that March is the month during which the new round of fiscal stimulus has been disbursed into the economy.
We talk about $1.9 trillion that reached U.S. households in the form of direct grants and also helped stringent needs of the American economy, such as vaccines rollout. As such, from Retail Sales to industrial production, the data for March should beat expectations. The big question is – by how much?
As for the stock market, it ended the previous month at all-time highs. If we have a look at the historical monthly return statistic, April is quite a good month in terms of delivered returns.
Surprisingly, the U.S. dollar strengthened in March, despite a higher stock market. The divergence is unusual, as the reflation theme seen dominant at the end of last year requires a weaker currency.
All in all, an interesting month starts today, with the most important piece of economic data to be released tomorrow – the NFP report for March 2021.