According to Mikael Olai Milhøj, analyst at Danske Bank, today’s NFP report was mainly positive and no smoking gun. They still expect the Federal Reserve to raise rates three times during 2016 but recognized downside risks. Key Quotes: “In our view, the jobs report was mainly positive, although the headline was weaker than expected.” “Still, the markets got some relief, as, in our view, markets expected a much more negative report. Also, it is worth remembering that it is not unusual to see slower employment growth in the months following a time when it has been higher than the trend. Trend growth still seems solid, in our view. “As we expect the US labour market to tighten further this year, we also expect wage inflation to increase. We know from recent Fed communications that it would like to see more ‘hard’ evidence that inflation will increase. Hence, AHE (Average Hourly Earnings) we believe will be an important market mover this year. “With respect to our current Fed call, today’s release was no smoking gun. We still expect three hikes this year (April, September and December), although we recognise that risks are skewed towards later and fewer hikes.” For more information, read our latest forex news.