Trading Radar: Nonfarm Payrolls, ECB, and the FOMC
Michael Sedacca
Next week will be the busiest one in quite some time. Both the European Central Bank and US Federal Reserve will make rate decisions. For the ECB, it is becoming more widely expected that the central bank will cut its main refinancing rate to 0.50% from 0.75%, despite money market rates effectively being at 0 after 1 trillion euros of long-term refinancing operations (LTRO). However, it is worth noting that ECB President Mario Draghi has yet to be reactive to markets, so we are dubious as to whether or not the ECB will cut the main rate.
As for the Federal Reserve, commentary from FOMC members during the February and March months were pointed more toward moderation in monetary policy. Recently, coinciding with a continued downturn in economic data, if anything they have turned more dovish and may point toward more accommodative policy.
Purely on the economic data front, nonfarm payrolls are expected to rebound toward their longer run average at 155,000. Given the less-than-stellar reports thus far in April, it would be difficult to see a report that is above that mark. NFP isn't the only significant economic report next week. On Monday, personal spending and personal income for March will be released. This will be the first month that the data will not be distorted by dividend income. Personal spending has been flat to down this year as consumers save less in order to keep spending habits the same. Lastly the national ISM manufacturing survey will be released on Wednesday. Thus far, April regional manufacturing surveys have been mixed -- some have been great, some have been terrible, and some have been flat.
On the earnings front, notable reports for the week include LinkedIn (LNKD), Mastercard (MA), Visa (NYSE:V), Buffalo Wild Wings (BWLD), and Comcast (CMCSA).
