The Last Market Focus Prior to March FOMC Meeting

Keep a very close on the crucial US labour market data in Feb, to be released this afternoon at 13:30 GMT. It includes non-farm payroll headline and revision figures, unemployment rate and average hourly earnings.

Apart from the significant non-farm payroll figure, we also need to pay attention to other labour market data to obtain a broader scope of the overall labour market performance.

The US labour market data in Feb is the last variation and market focus for a potential rate hike, before the upcoming FOMC Mar 14-15 meeting.

Last week 7 out of 10 FOMC members have made a hawkish comment. Noticeably, the Fed doves, the Chair Yellen and the FOMC permanent voting member Brainard, both made a hawkish speech.

The market expectations on a Mar rate hike have been largely priced in since Fed. Per the CME’s FedWatch tool the current probability of a rate hike in Mar has jumped to 88.6%.

The average figure of non-farm payroll in the past 6 months is around 189K, which is similar to the 190K estimate in Feb. If the upcoming NFP figure outperforms or is in line with expectations, then we can expect a probable rate hike in Mar. However, if it is lower than 140K, then it will likely moderately lower the probability of a rate hike.

Be aware that according to past experience, the market trends sometimes reverse within 1-2 hours after the initial move.

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