U.S. equity benchmarks ripped higher on Friday after Average Hourly Earnings missed expectations and came in at +0.1%. Additionally, last month’s +0.3% was revised down to +0.2%. Job growth was solid at 164,000 and though below the 189,000 expected, last month was revised up to 135,000 from 103,000; making up the difference.
The dollar is showing signs of momentary weakness after the latest FOMC statement indicated to investors that the Federal Reserve will not raise U.S. interest rates at a faster pace than has already been priced into the market.
The pieces are falling into place, but there is still a mountain to climb. Yesterday morning, we laid out many of the geopolitical headwinds that face this market. Nothing has been solved overnight but the market’s recovery from yesterday’s low, while extremely technical, exudes its resilience.
Today’s main event risk for the dollar, and potential market shaker will be the outcome of the Federal Reserve’s meeting, which is widely expected to conclude with monetary policy left unchanged. Although May’s FOMC meeting will not include a press conference or fresh economic projections, investors should not be quick to expect the meeting to be a “non-event.”