Total Employment increased by 313K in February while Unemployment held firm at 4.1% for the fifth running month.

Economists had expected a pick to 205K, a tad higher than January’s 200K, but to everyone’s surprise the NFP reinforced a positive momentum for the US economy, yet, action in the currency markets was not impressive as wage growth grew with a slower pace.

With a 42-Month record high on added jobs and three consecutive upward revisions of the jobs number Fed’s decision to raise interest rates last month was fairly justifiable.

Wages and inflation boost amid low unemployment supported an economy expansion in January and February which did in no way materialise on the US Dollar. Instead, forex rates fell in March as President Trump’s tariffs weighed in.

Employment rose in construction, retail trade, professional and business services, manufacturing, financial activities, and mining.

US Change in Nonfarm Payrolls is expected to be 190K in March, down from 205K expected in February. Most importantly, economists expect the Unemployment Rate to decline to 4.0%, a figure not seen since December 2000. The Employment Situation for March is scheduled to be released on Friday, April 6, 2018, at 12:30 p.m. (GMT).

What to look for in March’s report…

1. US and EU Interest Rate differentials: The Fed rose the interest rate from 1.5% to 1.75%, Powell’s first hike, as markets had expected since last January. Markets do expect another two rates hikes for 2018, or even three, however, remain tuned to Powell’s words as sensitivity to a tighter Fed plays a key factor for directional activity. The hike and any further expectations for a hike would be moving the spread in the Dollar’s favour.

2. ISM Manufacturing and Non-Manufacturing Employment Index: The ISM Manufacturing Employment Index registered 57.3%, a decrease of 4.02% from February reading of 59.7% while the ISM Non-Manufacturing Employment Index decreased 6.6% in February to 55% from the January reading of 61.6% despite the strong new orders on Trump’s metal tariffs panic buying. Both reports account for more than two thirds of the US’s economic activity, hence, it is important to focus on upcoming ISM Services PMI on Wednesday.

3. Volatility and the Equities Market: The Volatility Index (VIX) rose 81% in Q1 2018 showing fear is back in the markets big way. Equities came under pressure and saw a 2-year correction following the panic sell amid reports that US wages increase more than expected, indicating expanding inflation, which in turn signals interest rates increases. And the rate hike did indeed occur in March’s FOMC, but fears of rising inflation subdued amid lower wages numbers published in February’s NFP.

4. Unemployment Claims: The Unemployment Claims fell to a fresh 45-year low last week while market expected 15K more people to claim. The 4-week moving average was 12K lower from the previous week’s average. The release produced the 158th successive week in which claims come out below 300K, supporting a strong labour market. Fed’s target for Unemployment by year’s end stands at 3.8%, thus, investors will eye the week-to-week volatility.

5. Oil price and inflation figures: Oil corrected below $60 per barrel last month while the Core CPI fell at 0.2% (exp 0.2%, prev 0.3%) as expected. Without necessarily this being bad news the recent pickup near $66 is likely to challenge Fed as a strong inflation will require tighter policy.