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U.S. employment gains likely slowed in January as the boost to hiring from unseasonably mild weather faded, but an expected rebound in wages and a steady jobless rate will suggest the labor market recovery remains firm.

Non-Farm payroll is expected increased by 189,000 jobs last month, according to Forexfactory.com

Though that would be a sharp step-down from the 292,000 jobs created in December and the average 284,000 positions per month in the fourth quarter, it would largely reflect payback after the warmest temperatures in years bolstered hiring in weather-sensitive sectors like construction.

"Payroll growth has been running above trend over the past three months," said Dana Saporta, an economist at Credit Suisse in New York. "It's reasonable to expect a slower pace of payroll growth in the January data. Anything close to forecast will provide further evidence the labor market is still very strong."

Against the backdrop of tightening financial market conditions, a deceleration in employment growth would further undercut the case for a Fed interest rate hike in March. The U.S. central bank raised its short-term interest rate in December for the first time in nearly a decade.

"We should recognize that the fourth quarter (job growth) was bloated by favorable weather conditions and January was not," said Ray Stone, an economist at Stone & McCarthy Research Associates in Princeton, New Jersey.

"If I were on the Federal Reserve's policy committee, it would not really change my mind. Markets have been turbulent, financial conditions are less accommodative now ... I may be less inclined to tighten now that I was in December."

China's central bank in further injects funds 5 straight days in this week into the financial system open market operations to ease liquidity before the Lunar New Year holiday. Today, The People's Bank of China conducted 60 billion yuan of 14-day reverse repurchase agreements (repo) and 90 billion yuan of 28-day reverse repo, a process in which central banks purchase securities from banks with agreements to resell them in the future. The bank injects funds 510 billion yuan in total this week.

PBOC takes net additions via open-market operations this year to 1.6 trillion yuan, data compiled by Bloomberg show. That compares with 400 billion yuan in 2015. The PBOC also took the unprecedented step of doing the operations daily, instead of twice a week, either side of the holidays.

Demand for cash usually increases as people hoard funds to pay for trips, feasts and gifts in the run-up to Chinese New Year. Record capital outflows that led to the first annual decline in the nation’s foreign-exchange reserves in more than two decades have further tightened liquidity this year.

“The PBOC has to add an unprecedented amount of cash before the Chinese New Year to maintain stability in the financial system,” said Wang Ming, chief operations officer at Shanghai Yaozhi Asset Management LLP, which oversees 4 billion yuan of fixed-income securities. “Capital outflows widened the funding gap, and that’s why so much money is needed.”

Reference: Reuters, Bloomberg