Commenting on US GDP and pandemic-low jobless figures, Ali Jaffari, Head of North American Capital Markets at Validus Risk Management, said: “US initial jobless claims and QoQ GDP came in slightly lower than consensus estimates at 406K and 6.4% respectively. Employment data remains a key focus for the Fed and a continued convergence to pre-pandemic levels will certainly drive the thinking on tapering discussions.
“The jobless claims print has been on a declining trend and this week’s figures mark a pandemic low. As the US economy progresses with its vaccination program and reopening measures, employment and labor force participation are expected to pick up in the coming months. While US Treasuries declined on the release, equity futures continue to be range bound.
“Looking ahead, although this GDP and jobless claims print may not be sufficient to change the Fed’s thinking, a continued trend will certainly place pressure on the Fed to initiate talks on the reduction in its pace of asset purchases.”