US jobless claims to frame up fed rate hike decision

Fed Rate hike decision: The latest commentary from Fed officials have suggested that a June interest rate hike is now unlikely but a move in September remains on the cards providing the data shows economic growth rebounding from its Q1 fall.

This week's economic data have so far mostly been consistent with a decent pickup and markets will be watching closely to see if that is also true of payrolls.

Unemployment reports: Today's payrolls report will be observed as probably the first indicator for June month. Indeed, the Fed's identification of further labour market improvement as one of the key preconditions for a hike in interest rates has, if anything increased its importance. The forecast of unemployment rate is stood unchanged from previous 5.4%.

Most alternative indicators suggest that the labour market has continued to tighten in May. In particular, initial jobless claims fell to a new recovery low.

We expect a 230k rise in employment, which would be the largest since February, while the unemployment rate is forecast to be stable at 5.4%, and earnings growth is expected to pick up modestly to 2.3%.

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Margins requied for shorting calls.