The week Ahead – Non Farm Payrolls, French Election Debate and Trump Xi Meeting

As we enter the first week of 2017 second quarter, a busy week is upon us. During the last weeks, financial markets consolidated until further clarification arrives. Concerns remain in the form of interest rates, US fiscal economic policy, European elections and political uncertainty.

Here are the main economic events of the upcoming week:

US Non-Farm Payrolls

The last nonfarm payrolls approved a rate hike to a range of 0.75% to 1.00% at the Federal Reserve meeting on March 14-15 after a surprising surge of 235K. Analysts expect an increase of 180K new jobs on Friday. Markets will also be watching the US employment rate which is expected to remain unchanged at 4.7%.

As markets test the next rate hike timing and whether the Fed will raise rates four times during the rest of the year, a good reading can confirm the Fed’s confidence with the overall US employment.

On Wednesday, ahead of US nonfarm payrolls, the ADP report will be released. Analysts expect growth of 200K new jobs compares to the previous month of 298K.

Fed Meeting Minutes

On March 14-15, the Federal Reserve raised US interest rate by 25 basis points. Latest statements by Fed members signaled the US economy is expanding as expected by the US central bank.

On Wednesday, the Fed will release its March 14-15 meeting minutes as it should provide more details about the Fed’s latest rate hike and their future rate hike projections.

Investors will be closely watching for hawkish/dovish comments by the Fed minutes to signal the next direction of financial markets. Next rate hike is expected in June as markets are currently pricing 58.7%, according to Fed Watch tool.

Reserve Bank of Australia Interest Rate Decision

On Tuesday, 4:30 GMT, the RBA will publish its interest rate decision. Analysts expect the central bank to hold rates at a record low of 1.5% as the Australian economy remains in a sensitive condition.

Investors will be focus on any hints that can signal the next central banks’ actions.

Donald Trump to Meet with Chinese President Xi

Chinese President Xi Jinping will meet the US President Donald Trump on Thursday and Friday at Trump’s resort in Florida. According to the White House official release, the two will deal with ‘global, regional and bilateral issues of mutual concern’.

Xi and Trump meet after complex development between the two countries. Trump has accused China to manipulate currencies several times and after Trump’s phone call with Taiwan’s leader, a sign of ‘One China’s policy’.

On Thursday, Trump said on Twitter: “The meeting next week with China will be a very difficult one that we can no longer have massive trade deficits”

The meeting next week with China will be a very difficult one in that we can no longer have massive trade deficits…

— Donald J. Trump (@realDonaldTrump) March 30, 2017

French Election Debate

As the first round of voting on April 23 is getting closer, French presidential candidates will attend the second televised debate. France, along with the rest of the world, is curious to see whether the populist candidate Marine Le Pen can carry away the French nation into a protectionist political system.

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