Developments in the week ahead will be understood within the context of last week’s developments. The most important of these are the strength of the US jobs report and cuts in growth and inflation forecasts by the European Central Bank and the Bundesbank.
By two measures, the US employment report was among the strongest since the Great Financial Crisis. First, the monthly increase in non-farm payrolls of 321k has only been surpassed three times since the fall of Lehman. Moreover, the job growth over the past two months was revised higher by 44k.