📝Strong Employment Report Should Support 100bp of Tightening By June: ING

We think the dollar can find more support this week, as markets may continue to speculate on multiple 50bp rate hikes by the Fed in the remainder of the year. Investors are probably just expecting some confirmation that the US jobs market has remained tight to cement their hawkish views: this week we’ll see the Jolts opening data first, and the ADP and official payrolls later. Our US economist expects the headline nonfarm payroll number to come in at 500k, which should be enough to support expectations around 100bp of tightening by June – which is also our house call. The 5Y-30Y portion of the US yield curve has inverted for the first time since 2006 on the back of sharply rising front-end yields, a dynamic that should offer more support to the dollar. We think DXY can continue to advance in the coming days and test 100.00, with European currencies and the yen still likely to be the main victims.

- ING Economics