United States' January establishment survey came in weak as nonfarm payrolls grew by 151k, not in line with markets expectations of 190k, which resulted from slow growth in the services sector employment. Services sector payrolls grew only by 118k m/m, as weakness in education services employment weighed down its growth. However, goods sector payrolls grew by 40k, while manufacturing and construction increased by 29k and 18k payrolls respectively.

Household survey came in strong as employment rose by 615k; resulting the unemployment rate to decline to 4.9 percent, in the presence of one-tenth rise in participation. Labour market is likely to remain strong, alleviating recession risk in the U.S., however, sluggishness in services sector employment in the establishment report is likely to weigh on the economy's growth.

"The divergent signal from the employment report, plus the ongoing volatility in financial markets, leads us to revise our outlook for the path of Federal Reserve policy; we now expect two rate hikes this year in June and December, as opposed to three in our previous baseline," said Barclays in a research note.