UNITED STATES April 05 2017 4:23 PM

NEW YORK (Scrap Register): Friday’s release of U.S. nonfarm payrolls will be one of the most important events of the week for the foreign-exchange and other commodities markets, said Brown Brothers Harriman.

U.S. nonfarm payrolls are often the single most important economic report in the U.S. monthly data cycle. After two months of jobs growth in excess of 200,000 a month, a reversion to the mean seems likely. It may have been hinted by the increase in weekly jobs claims. Payback may come from manufacturing and construction sectors, which have been particularly strong. 

However, provided that job growth does not collapse, but simply returns to trend, it ought not to impact expectations for Fed policy. A June hike still seems to be the most likely scenario.

Wednesday will bring release of minutes from the last Federal Open Market Committee meeting. BBH comments that the FOMC minutes often have a high noise-to-signal ratio as voters and non-voters voices are included, and the important views of the leadership are obscured.

Meanwhile, at the end of the week, the U.S. and Chinese presidents are scheduled to have their first face-to-face meeting. U.S. President Donald Trump “has toned down the bellicose rhetoric in which he accused China of ‘raping’ America, threatened to abandon the one-China policy, and promised to cite China as a currency manipulator ‘on day one,’” BBH pointed out.

China seems to have made a few concessions. It has banned coal imports from North Korea, and the U.S. had long wanted China to do more to rein in its ally. It has also granted Trump a little more than three dozen trademarks.