Payrolls day in the US

The euro and sterling failed to add to Wednesday’s gains against the dollar in yesterday’s session and both are a touch lower this morning ahead of the US employment report for March later today, trading at around $1.0830 and $1.2625 respectively. This in turn leaves EURGBP once again little changed trading at about 85.8p.

US stocks fell quite sharply into the close, reversing prior gains to end down more than 1%, with concerns about the continuing rise in oil prices cited as contributing to the turnaround. European indices had earlier closed broadly flat on the day. Meanwhile, in bond markets, yields continued to nudge lower, by 3-4bps in the case of 10-year yields.

Geopolitical concerns continue to put upward pressure on oil prices. Brent crude has risen to over $91 per barrel and is now up around 4% since the end of last week and about 10% (or almost $10 higher) since the middle of March.

A number of Fed members commented on the outlook for monetary policy yesterday. The general thrust of what they had to say was that the central bank is not in a hurry to cut rates but is still likely to easy policy this year, though one member (Kashkari) mused that it may not cut rates at all in 2024 if progress on lowering inflation stalls.

The latest Exchequer returns in Ireland show tax revenue rose by 1.8% year-on-year in the first quarter of 2024. Income tax and VAT receipts both rose strongly, reflecting solid employment/wage growth and consumer spending, but corporation tax receipts were down year-on-year in Q1, with the weakness concentrated in March and likely to reflect timing factors according to the Department of Finance.

The US employment (payrolls) report due later today is expected to show the economy added 214k jobs in March, down from a gain of 275k in February, according to the consensus forecast, with unemployment seen nudging down to 3.8% (from 3.9%) and annual wage growth easing to 4.1% (from 4.3%). Other data due today include Euro retail sales and the UK construction PMI .