This week’s economic calendar will provide fresh insights into factory sector activity as well as the labor market. The main event will undoubtedly be Friday’s January employment report. Our forecasts for headline (+80k forecast vs. +50k previously) reflect a mild uptick in the pace of net job gains relative to their three-month and six-month averages. If our forecasts prove close to the mark, we expect the unemployment rate to come a tad soft at 4.3%. Regarding other details of the report, we anticipate average hourly earnings growth (0.3% vs. 0.3%) as well as hours worked (34.2hrs) to both remain steady. But the highlight of last week was President Trump nominating former Fed Governor Kevin Warsh to be Powell’s replacement as chair. We do not anticipate any great change in monetary policy from his appointment alone. The FOMC’s process of rate setting is deeply embedded into the FOMC and will take more than a new Chair to upend. We believe deep inside Warsh is a genuine monetary policy hawk. Hence the dollar reaction on Friday and precious metals rout too. In US macro data this week, we have ISM manufacturing, ISM services, JOLTS, ADP & Jan NFP. There is no dated UST supply this week although US treasury will come out with it's quarterly treasury refunding announcement this week. In RoW events,we have ECB & BOE meetings on Thursday where we expect status quo. In European macro data, we have German factory orders & Euro area HICP figures this week.
