Bond prices and a global stock index rose on Friday after a jobs report in Eunited states surprisingly strong that gave investors confidence that the Federal Reserve (Fed) can engineer a “soft landing” for the economy.
American employers hired more workers than expected in December and raised wages wages at a good pace, leading markets to revise downward expectations that the US central bank will begin cutting interest rates in March.
These prospects were initially considered negative and added to the hangover of New Year of the equity markets after their advance at the end of last year. However, the main indices of Wall Street were trading higher, helping to lift 0.42% in global shares. MSCIwhile the price of Treasury bonds, which moves inversely to yield, also rose.
The jobs report was “a big positive surprise indicating that the US economy USA continues to perform well and is expanding,” said Tim Ghriskey of Ingalls & Snyder in New York to Reuters. “At least for now, it reversed the profit-taking that the market has experienced during this first week of the year.”
The Fed hopes to reposition the inflation at its 2% target without triggering a recession or a sharp increase in unemploymenta scenario dubbed a “soft landing” by policy makers and financial markets.
The yield on the benchmark 10-year Treasury bond fell 1.1 basis points to 3.980%, and the dollar index, which compares the greenback with a basket of six major currencies, was down 0.32%. He euro improved 0.29%, to $1.0975.
The pan-European index STOXX 600 lost 0.3%. The sharp rise in stock markets at the end of 2023 was based on expectations that the Fed would cut rates six times this year, coupled with significant tax relief European Central Bank (ECB).
The inflation data of the Euro zone showed that prices in the currency bloc rose 2.9% year-on-year in December, up from 2.4% in November, which could reduce the urgency for the ECB to start cutting borrowing costs from record highs.
Spot gold rose 0.5% to $2,054.39 an ounce, on track for a weekly decline of 1.3%. While the oil markets gained around 2% in a volatile session, as expectations of weak demand for China collided with concerns about supply disruptions in the Red Sea following attacks on ships by Houthi rebels in Yemensupported by Iran.
Source: Ambito
