.BY MAX LECESTER.
The March U.S. jobs report will be the main event for financial markets in the week ahead, as investors watch for further signals on the strength of the economy. Besides the employment report, this week’s calendar also features key U.S. retail sales figures as well as the latest data on manufacturing activity.
The economic reports take on added significance amid recessionary warning signals from the U.S. bond market, where 10-year Treasury yields fell below three-month Treasury bill yields for the first time since 2007 earlier this month.
Meanwhile, trade talks between the United States and China will also keep investors on their toes this week, as Chinese Vice Premier Liu He comes to Washington to meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
There are also Brexit headlines to monitor as British Prime Minister Theresa May struggles to find a way to get her withdrawal deal through parliament.
>>> The five biggest events on the economic calendar that are most likely to affect the markets :
1. U.S. Jobs Report
The U.S. Labor Department will release the nonfarm payrolls report for March at 8:30AM ET (12:30 GMT) on Friday. The consensus forecast is that the data will show jobs growth of 175,000, after adding just 20,000 positions in February.
The unemployment rate is seen at 3.8%, unchanged from a month earlier. However, most of the focus will likely be on average hourly earnings figures, which are expected to rise 3.4% from a year earlier, similar to the increase reported in February.
2. U.S. Retail Sales
The Commerce Department will release data on retail sales for February at 8:30AM ET (12:30 GMT) on Monday. The consensus forecast is that the report will show retail sales inched up 0.3%, following a gain of 0.2% in January and December’s shocking decline.
Excluding the automobile sector, sales are expected to rise 0.4%, after climbing 0.9% in the preceding month. Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy. Consumer spending accounts for as much as 70% of U.S. economic growth.
3. ISM Manufacturing Survey
The U.S. Institute of Supply Management will release data on March manufacturing sector activity at 10:00AM ET (14:00 GMT) on Monday. Economists expect a reading of 54.2, unchanged from the month earlier. Anything above 50.0 signals expansion, while readings below 50.0 indicate industry contraction.
Other top-tier economic data due this week includes durable goods orders, ADP (NASDAQ:ADP) private sector payrolls, as well as the ISM survey on service sector activity. A recent batch of underwhelming data stocked worries that the economy was fast losing momentum after growth slowed in the fourth quarter.
4. U.S.-China Trade Talks
Chinese Vice Premier Lui He will travel to Washington to meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin for further talks aimed at ending a months-long trade war between the world’s two largest economies. The U.S. and China said they made progress in trade talks that concluded in Beijing last week, with Washington calling them candid and constructive.
China’s state news agency Xinhua said the two sides discussed “relevant agreement documents” and made new progress in their talks, but did not elaborate in a brief report. Reuters reported previously that the two sides were negotiating written pacts in six areas: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade.
5. Brexit Stalemate
British Prime Minister Theresa May is facing a new push by members of her Conservative Party to lead Britain out of the European Union in the next few months, even if it means a potentially damaging no-deal Brexit. Conservative lawmakers urged May against a long extension of the Brexit process in a letter sent after her exit deal was rejected for a third time by the House of Commons on Friday, a lawmaker said.
On Monday, lawmakers will try to agree on an alternative to May’s Brexit plan. The options that have so far gathered most support involve closer ties to the EU and a second referendum. May has less than two weeks to convince the 27 other EU countries that she can solve the impasse. Otherwise she will have to ask the bloc for a long extension or take Britain out of the EU on April 12 with no deal to soften the economic shock.
Write to Max Lecester at email@example.com