The Week Ahead: US jobs report, Broadcom results, ECB rate decision

The US 10-year Treasury yield fell to 4.247% on Wednesday, down from above 4.8% in January, amid a deteriorating outlook for the US economy brought on by geopolitical tensions and fears of slowing growth. These market jitters could come to a head this coming week, with several important data points slated for release, including the US Bureau of Labor Statistics’ jobs report, the private sector jobs report from payroll processing firm ADP, and updates on services and manufacturing activity from the Institute for Supply Management.

Across the Atlantic, the European Central Bank’s rate decision on Thursday will play a key role in determining the direction of the euro versus the US dollar. And back in the US, Broadcom’s first-quarter results, also out on Thursday, will either soothe or sharpen investor concerns over Nvidia’s performance. US markets fell after Nvidia reported Q4 results on Wednesday, with the chipmaker warning that margins would tighten in Q1.

US jobs report

Friday 7 March
Economists estimate that the US economy added 133,000 jobs in February, down from 143,000 in January. Meanwhile, the unemployment rate is expected to remain unchanged at 4%, while average hourly earnings are forecast to have risen 0.3% month-on-month, down from January’s 0.5% uptick.

If the jobs report reveals a robust US labour market, that could add to concerns that inflationary pressures are not fully under control. In turn, that could make the Fed reluctant to cut interest rates, making dollar deposits more attractive and potentially strengthening the dollar against the Japanese yen. 

The USD/JPY pair has shown signs of dollar weakness of late, with the yen strengthening to around ¥149 per dollar, down from more than ¥158 at the start of the year. However, ¥149 is where the yen has stalled. Additionally, the relative strength index has rebounded off a reading of 30, suggesting that momentum may be turning. If USD/JPY’s bounce off support at ¥149 continues, the yen could weaken further, potentially to the ¥154.50 to ¥155 range. Conversely, a weak US jobs report could see the yen strengthen past ¥149 and possibly head towards ¥143. 

USD/JPY, April 2024 - present

^{Sources: TradingView, Michael Kramer}

Broadcom Q1 results 

Thursday 6 March
Analysts expect Broadcom to report that fiscal Q1 2025 revenue grew 22.2% to $14.6bn, boosting earnings by an estimated 35.4% to $1.49 a share. Gross margin is forecast to be 77.7%. Looking ahead, analysts think the semiconductor maker’s Q2 revenue will grow 22.1% to $14.6bn, with a gross margin of 77.4%, resulting in earnings at $1.49 a share for the second quarter in a row. For the full year, analysts estimate total revenue will climb 19.1% to $61.4bn. The options market anticipates that the Broadcom share price, down roughly 15% year-to-date at $197.80 as of Thursday’s close, will rise or fall by around 8.5% following the Q1 results.

The stock looks vulnerable heading into the earnings announcement. A break below support at current levels could send the Nasdaq-listed shares down to a gap near $185, which was created the last time the company reported quarterly results. A break below that gap could lead to further declines, possibly pushing the stock down to $160. While this may seem unlikely, the relative strength index has moved lower, signalling the potential for further downside. 

Broadcom share price, January 2024 - present

^{Sources: TradingView, Michael Kramer}

ECB rate decision

Thursday 6 March
The market expects the European Central Bank to cut interest rates by a quarter of a percentage point on Thursday, but the bigger question surrounds the potential for further cuts. Traders are betting that the ECB has not finished lowering rates and that more cuts will follow in future meetings. The outlook for further easing of monetary policy is one of the key reasons why the euro has struggled against the US dollar. 

The EUR/USD pair has fallen below $1.04, reversing sharply after testing the $1.052 level several times in the past five weeks. The euro could weaken further against the dollar if the ECB continues to lower interest rates to stimulate growth, particularly if the US Federal Reserve keeps rates at current levels to combat inflation and President Trump imposes tariffs on imports from Europe. Now that the euro has dipped beneath a short-term uptrend, as shown on the chart below, it could slip to $1.03 in the near term. 

EUR/USD, April 2024 - present

^{Sources: TradingView, Michael Kramer}

Key economic and company events

The coming week’s major economic announcements and scheduled US and UK company reports include:

Monday 3 March

• China: February Caixin manufacturing purchasing managers’ index (PMI)
• Eurozone: February flash harmonised consumer price index (CPI)
• US: February Institute of Supply Management (ISM) manufacturing PMI
• Results: Bunzl (FY)

Tuesday 4 March

• Australia: Reserve Bank of Australia rate meeting minutes, January retail sales
• Eurozone: January unemployment rate
• Results: Abrdn (FY), Ashtead (Q3), AutoZone (Q2), Beazley (FY), CrowdStrike (Q4), Flutter Entertainment (FY), Greggs (FY), Intertek (FY), Ross Stores (Q4), Sea (Q4), Weir (FY)

Wednesday 5 March

• Australia: Q4 gross domestic product (GDP)
• China: February Caixin services PMI
• Switzerland: February CPI
• US: February ISM services PMI, February Automatic Data Processing, Inc. (ADP) employment change
• Results: Marvell Technology (Q4)

Thursday 6 March

• Australia: January trade balance
• Eurozone: European Central Bank interest rate decision, January retail sales
• US: Weekly initial jobless claims to 28 February
• Results: Admiral (FY), Broadcom (Q1), Costco (Q2) Endeavour Mining (FY), Entain (FY), Gap (Q4), Harbour Energy (FY), ITV (FY), JD.Com (Q4), Kroger (Q4), Melrose Industries (FY), Reckitt Benckiser (FY), Rentokil Initial (FY), Schroders (FY), Vistry (FY)

Friday 7 March

• Canada: February unemployment rate
• China: February trade balance
• Eurozone: Q4 GDP
• Germany: January factory orders
• US: February jobs report, including non-farm payrolls
• Results: No major scheduled earnings announcements

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.