PrefBlog

The jobs numbers are coming out on Friday … and we have the usual level of speculation and teasers:

U.S. private payrolls increased more than expected in March, pointing to continued labour market strength.

Private payrolls rose by 184,000 jobs last month, the most since last July, after advancing by an upwardly revised 155,000 in February, the ADP Employment report showed on Wednesday.

Economists polled by Reuters had forecast private employment increasing by 148,000 last month compared to the previously reported 140,000 in February.

Wages for workers remaining in their jobs increased 5.1 per cent on a year-on-year basis, after a similar gain in February.
…
According to a Reuters survey of economists, the Labor Department’s Bureau of Labor Statistics is expected to report that private payrolls rose by 160,000 jobs in March after increasing 223,000 in February.

Total nonfarm payrolls are estimated to have increased by 200,000 jobs in March after rising 275,000 in the prior month. The unemployment rate is forecast unchanged at 3.9 per cent, and annual wage growth is seen slowing to 4.1 per cent from 4.3 per cent in February.

PerpetualDiscounts now yield 6.64%, equivalent to 8.63% interest at the standard equivalency factor of 1.3x. Long corporates yielded 5.05% on 2024-3-22 and since then the closing price of ZLC has changed from 15.09 to 14.79, a decrease of 199bp in price, implying an increase of yields of 16bp (BMO reports a duration of 12.43, but don’t disclose whether this is Macaulay or Modified; I will assume Modified) to 5.21%. Therefore, the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has declined significantly to 340bp from the 355bp reported March 27.

This entry was posted on Wednesday, April 3rd, 2024 at 7:44 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.