Indices 

As trading on the US markets was closed on Friday due to the Easter holidays, the reaction to the worse-than-expected NFP data was only seen on the futures markets, which strengthened massively. Monday to Thursday trading was relatively light and choppy, also due to the fact that many institutional investors had already executed their “window dressing” trades before the close of the quarter during the previous week.

The banking crisis is no longer having as strong an impact on European equities as in recent weeks, but indices ended with mixed results. Since last Friday, the STOXX Europe 600 was up 0.24%, the FTSE 100 added 1.44%, the CAC 40 was up 0.03%, while DAX 40 was down by 0.20%.

Forex

The US Dollar has had its sixth straight week of declines, despite Friday’s strengthening after the labour market data. The economic outlook in the US remains challenging since data released last week, including jobless claims, PMIs, ADP and the JOLTS report showed that tighter financial conditions are already hurting the economy.

The British pound broke the 1.25 level during the week, its highest level since July 2022. Investors are expecting further rate hikes caused by the Bank of England in its battle with inflation, which rose to 10.4% in February. A stronger economy thanks to falling energy prices was also supportive.

Macro

Monday’s manufacturing PMI data showed that the economic activity on both sides of the Atlantic is slowing down again after a slight improvement. The services sector is expanding, but at a slower pace than expected.

The main news of the week was the US labour market data, which finally points to a cooling down. According to data from the Labor Department released on Tuesday, job openings in February declined to 9.9 million, much more than expected, falling to levels last seen in May 2021.

Then on Wednesday, ADP reported private-sector payrolls, which rose in March but at a slower-than-expected pace. Thursday’s initial jobless claims rose above 228K, while the previous week’s data was revised significantly upward. Friday’s data showed that U.S. non-farm payrolls increased to 236K in March, slightly below the forecast of 239K. Data for February was revised higher to show 326K jobs were added instead of 311K as previously reported. The unemployment rate fell to 3.5% from 3.6% in February.