Where next after nonfarm payrolls? - ANZ

With all of the recent events in the finacial markets, analysts at ANZ explained that the only way to describe last week’s US payroll report is as a shocker.

Key Quotes:

"A weak headline number and negative revisions make the trend look far less complimentary. If this trajectory is sustained, it certainly clouds the near term case for a rate hike from the US Federal Reserve.

Luckily we do not need to wait long to see how the Fed reacts, with Janet Yellen speaking tonight. Her speech on the Economic Outlook and Monetary Policy will be watched very closely for any signs that the Fed is backing away from its recent campaign to prepare the market for another hike in the next meeting or two. Certainly the market no longer thinks it is a possibility with the June meeting priced as only 4% probability of a hike, and July priced at a 27% probability. Given all the other information that we have on the economy, we think that this pricing now sits on the conservative end of the spectrum."