There are two events that will generate most of the newsflow narrative for the week.
First and foremost, the US employment data at the end of the week will be the central focus. The expectations are for +80k private payrolls with the unemployment rate ticking up 0.1 to 9.7%. With the weekly jobless claims holding between a range of 450k to 480k, there isn’t a lot of optimism for strong payroll growth. As most know, the US economy needs between 120k and 150k of NFP just to keep the unemployment rate steady.
The lack of small business hiring is the critical aspect of why overall job growth remains subdued. The reasons vary from a lack of bank lending to a slew of new regulatory burdens to uncertainty over personal and business taxes. Small business (>100 workers) generated 2/3rds of the employment growth in the last expansion and employ over 50% of the US workforce. The dearth of hiring from this group underscores the limits of the Federal Reserve to stimulate via cheap money when those funds are not making their way to small firms.