Strong jobs growth in the US

The dollar gained some ground on Friday following the release of the February employment report in the US. It strengthened to under $1.23 for a time against the euro and to under $1.38 against sterling, before easing back somewhat. Bond yields in the US also rose post the data, with 10-year yields up to 2.90% again

Employment in the US rose by 313,000 in February, according to Friday’s report, much stronger than the 200k gain the consensus expected. The unemployment rate remained at 4.1% last month, though it is likely to resume its descent in the coming months, while annual earnings growth dipped to 2.6% from 2.8% in January

The report  almost certainly copper-fastens an increase in interest rates at the Fed’s policy meeting next week, and is likely to be followed by further rate hikes over the remainder of this year – the market will be looking for some guidance from the Fed as to how many might be in the offing

The UK Chancellor will present his Spring Statement to parliament tomorrow, which will contain updated forecasts for the UK economy over the next few years. More immediately, the National Institute for economic research estimate that the economy grew by 0.3% over the three months to February, slightly below the 0.4% q-o-q increase in the final quarter of 2017

Data due this week include CPI inflation (tomorrow) and retail sales (Wednesday) in the US, while Euro area employment and industrial production are scheduled for tomorrow