The softening in some of the metrics in the February jobs report is easing fears of a more hawkish Fed, especially in light of the failure of SVB
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Non-farm payrolls came at 311K last Friday noticeably beating expectations. We reached out to Andria Pichdi to have a more detailed look at the possible implications for the incoming Fed decision.
FXMAG.COM: Could you please comment on the NFP print after it's released, what could presented value mean to Fed?
Andria Pichdi (HF Markets): Fed policy uncertainties rose after the collapse of SVB in the US! Local stock markets rallied as traders reined in Fed tightening expectations. The employment report failed to fully support expectations for a 50 bp Fed hike, coupled with a huge flight to quality and short covering trade on SVB news. The softening in some of the metrics in the February jobs report is easing fears of a more hawkish Fed, especially in light of the failure of SVB, with many in the market seeing that as a harbinger of troubles in the financial system. And they further suggest "the Fed broke it and will have to fix it with an easing in rates." The March implied rate has slipped to 4.908% versus 5.003%, again reflecting a better chance for a 25 bp increase rather than a half point pop.
