Last Friday’s U.S. December employment increased less than expected (+156k vs. +176k), but the markets interpretation in a rebound in wages (+0.4% m/m) suggests a sustained labor market momentum that sets up the domestic economy for stronger growth and further interest rate increases from the Fed in 2017.
This is a massive week for capital markets.
There are four central banks, including the Bank of England (BoE), Bank of Japan (BoJ), Reserve Bank of Australia (RBA) and the Federal Open Market Committee (FOMC) who will be keeping the various asset classes on their toes with their monetary policy announcements. None are anticipated to alter their current policies, but their noted intentions will have a lasting impact on asset prices. Perhaps, it’s a good time for the Fed to signpost a December rate hike?