US: Soft jobs report to offset strong activity data; mixed week for the USD - ING

Research Team at ING, suggests that given all the hype about Trumpeconomics and a proposed fiscal package, there is an added layer of anticipation over this week's US data.

Key Quotes

“The narrowing of the equity risk premium in recent weeks suggests a positive shift in US (and global) growth expectations and signs of healthy economic activity (a positive 3Q GDP revision, ISM manufacturing and housing market data) would justify this belief. Offsetting this, however, may be a tapering of inflation expectations; we expect a statistical quirk to result in a softer wage growth pickup in Friday’s US jobs report and this may see US yields retreat from their recent highs. While this would suggest a softer outlook for the $ (and potential for a consolidation of recent gains), we still think the big picture remains constructive. Look for a fall back in the DXY to 100 as an opportunity to go long.”