Wu's Weekly Macro Indicators and Analysis: U.S. Non-Farm Payrolls, Iran Situation

Compilation: GaryMa Wu on Blockchain

Summary

Last week, the Iran conflict was at the brink of “fragile ceasefire” with a high-stakes game, with Japan, the US, and European central banks all holding interest rates steady; this week’s focus is on the US non-farm payroll report and developments in Iran.

Last Week’s Review

In the past week, the Iran conflict was at the brink of “fragile ceasefire” with a high-stakes game. Tehran submitted a 14-point peace proposal demanding a full US military withdrawal and lifting maritime blockades; Trump publicly rejected it, saying “conditions are insufficient,” hinting that strikes could restart at any time. The US claimed hostilities had ended to avoid congressional review. Iran simultaneously proposed legislation to permanently block the Strait of Hormuz, with the Revolutionary Guard preparing to destroy aircraft carriers. Peace talks are deadlocked, with ongoing proxy battles in Lebanon and other battlegrounds.

The Federal Reserve announced the upper limit for interest rates at 3.75%, in line with expectations, unchanged from 3.75%. According to Wall Street Journal reporter Nick Timiraos, four votes opposed the rate hold, with three regional Fed presidents favoring ending easing policies and one governor supporting a rate cut; the last time four votes opposed was in 1992. Jerome Powell, in his final press conference as chair, stated his term will end on May 15, 2026, but he can remain on the Federal Reserve Board until January 2028; he said he would not leave until the criminal investigations surrounding the Fed are fully transparent and resolved, and that he would step down when he deems appropriate.

For the week ending April 25, initial unemployment claims in the US totaled 189k, below the expected 215k and the lowest since the week of September 24, 2022. The preliminary annualized quarterly core PCE price index for Q1 in the US was 4.3%, versus 4.1% expected and 2.70% previously. The March core PCE price index rose to 3.2% year-over-year, in line with expectations, up from 3.00% in February.

The Bank of Japan (BOJ) announced it would keep its policy interest rate at 0.75% for the third consecutive time, in line with market expectations.

The European Central Bank (ECB) decided to keep its three main interest rates unchanged: deposit facility rate at 2.00%, main refinancing rate at 2.15%, and marginal lending rate at 2.40%. This decision met market expectations.

The US March core PCE price index rose to 3.2% year-over-year, in line with expectations, but up from 3% in February.

Key Events & Indicators This Week

May 06

US April ADP employment (in ten-thousands) (20:15)

Trump to impose 25% tariffs on US imports of cars and trucks from the EU

May 07

US weekly initial unemployment claims (in ten-thousands) (20:30)

May 08

US April unemployment rate (20:30)

US April non-farm payrolls (seasonally adjusted, in ten-thousands) (20:30)