It’s certainly not an overstatement saying that the Friday’s payrolls’ numbers have surprised and confused many market participants and investors.

Notwithstanding the private sector average hourly earnings were up by 2.5 percent on a yearly basis, this important component seemed to be, at least to a part of the observers, a matter of some concern in the wake of a weak payrolls’ number on Friday.

Taking into account that the non-farm payroll numbers are always a wild stab in the dark on a good month and when looking somewhat closer look at the overall data I still think that a pair of Fed rate hikes this year on September 21 and December 14 are still on the cards.

June 15 and July 27 would appear to be unlikely times for a rate increase in the wake of the lower payrolls’ number in spite of low unemployment rate of 4.7 percent.

Yes, once again, less reasons of economics and more for reasons of presentation.

In the meantime, let’s not overlook the fact that quantitative policy is continuing to tighten at the moment and for now that must be enough to contain forces of rising inflation.

In context of all the above, and before Fed Chair Yellen gives her speech at 12:30 p.m. ET on “Economic Outlook and Monetary Policy” in Philadelphia, Cleveland Fed President, who is also a FOMC voter this year, also just gave a prepared speech “Perspectives on Quantitative Easing in the United States” wherein he said the three conditions, as the April FOMC minutes suggested, that would make it appropriate to further raise interest rates, and which are:

• A rebound in spending (growth from the first quarter level);
• Continued strength of the labor market;
• Additional progress towards reaching the Fed’s 2 percent inflation target

are met. 

Rosengren also expects “that economic conditions will continue to gradually improve, which in turn would justify further actions to normalize policy, continuing a gradual return to a more normal interest rate environment.”

Interestingly, but at the same time a very important statement was: “Despite the weakness in the recent employment report, at 4.7 percent unemployment we are now at my estimate of full employment.”

It will be really interesting to see what Janet Yellen will tell us today as she will surely know what Eric Rosengren has told his audience this morning.

After Yellen will have spoken there will be no more Fed speakers until the June 15 FOMC meeting as they enter their customary quiet period ahead of that meeting.

We should also not overlook that on Saturday, Cleveland Fed President Loretta Mester, who is also a FOMC voter this year, said that the weak May employment number hadn’t fundamentally altered her outlook:  “I still believe that in order to achieve our monetary policy goals a gradual upward pace of the funds rate is appropriate.”

It’s really interesting to see how much the Fed speakers’ and the markets’ expectations diverge, with the markets still only expecting one rate hike in December.

Besides all that, the UK EU referendum on June 23 appears to have caused some further agitation in the foreign exchange markets. The opinion polls are showing an increase in support for those wishing to leave the EU. Two recent polls show the "leave" vote ahead.

The sterling trade-weighted index fell 1 percent to a three-week low and the cost of hedging against volatility over the coming month hit its highest level since late 2008.

Yes, we could be on our way for some volatile weeks.

Etienne "Hans" Parisis is a bank economist who has advised global billionaires and governments on the financial markets and international investments. To read more of his articles, GO HERE NOW.