On the monetary policy front, the ECB’s monetary policy meeting summary found a balance, yet it lacked any new information. The minutes stated that the case for considering rate cuts was strengthening, but also highlighted concerns about service inflation.
However, it additionally said that the ECB will have “significantly more data and information by the June meeting,” implying that a first-rate decrease may be required then. Regardless, the minutes had no substantial effect on market rates yesterday.
Similarly, remarks by several Fed officials had no significant impact on trading conditions, as currency markets remained range bound. Of the limited price activity that occurred, the dollar remained under some minor weakness throughout the European trading day until recovering from a dip overnight.
Looking ahead today, Nonfarm Payrolls data is likely to reveal that the US economy generated 200,000 jobs last month, down from the 275,000-gain recorded in February. January’s figure was notably lower, showing 229,000 employment added rather than 353,000 as first reported.
The unemployment rate will likely stay at 3.9%. Meanwhile, Average Hourly Earnings, a major indicator of wage inflation, is expected to rise 4.1% for March, a slight decrease from February’s 4.3% growth.