Central banks and politics dominated the newswires last week as decisions from advanced economies were accompanied by the monthly US payroll report and a growing standoff with Iran. Central banks largely refrained from adjusting monetary policy in any demonstrable way, with both the Bank of Japan and Bank of England keeping rates on hold at -0.10% and 0.25%.
Each country upgraded their growth forecasts for the whole of 2017 with the Bank of England also focusing on the possibility of hitting the inflation target in February. Across the Atlantic, the United States Federal Reserve left interest rates on hold at 0.75% while remarking that inflation will rise to the 2.00% targeted. At this point, only two rate hikes are anticipated during the calendar year.
Moving back to Europe, the Euro Area is experiencing a revival as evidenced by the unemployment rate at the lowest point since 2009 while inflation hits the highest point since 2013. However, a new Greek debt crisis could add to political upheaval as populist and anti-EU parties gain traction. Meanwhile, an Iranian ballistic missile test accompanied by new sanctions is raising tensions while fueling an additional rally in oil prices just as the OPEC deal eliminated 1.400 million barrels per day in excess capacity during January.
US Payrolls Smash Estimates
Weekly Report - 05/02/2017