(BFM Bourse) – The American economy created more jobs than expected in December. This further muddied the waters on the future monetary policy of the Fed, which caused interest rates to jump. Explanations.
This was the statistic to watch in this first stock market week of 2024. The official American employment report ultimately came out more robust than expected.
The American economy created more jobs than expected, with 216,000 non-agricultural jobs created in December in the United States, after 199,000 in November. Economists expected on average 170,000 job creations last month.
The unemployment rate remained stable at 3.7% in December, where a slight rise to 3.8% was expected by the market. But as for the average salary, it is also up 0.4% over one month, while the consensus expected a slight slowdown to +0.3%. A point which fuels fears about possible inflationary pressures.
In the process, the yield on the 10-year US Treasury bond rose to 4.07% and thus returned to its December highs, while it was hovering around 4% a little earlier in the day. In Europe, the 10-year German Bund rate is trading at 2.183% and at 2.726% for the yield on French debt of the same maturity.
Fall in sight on Wall Street
In any case, these increases in bond yields are weighing on the risk appetite in the markets currently. In Paris, the CAC 40 remains down (-0.8%) below 7,400 points to 7,373 points after the publication of the statistic. In the United States, leading indicators show an opening down 0.4% for the S&P 500, and -0.6% for the Nasdaq when the Dow Jones is expected to be stable.
The trend was already weighed down by the inflation figures in Europe a little earlier. The latest battery of statistics published over the last two days therefore tempers high expectations about the pace of key rate cuts from the main central banks, with the American Federal Reserve and European Central Bank in the lead.
The CME’s FedWatch tool now puts the probability of a reduction in federal key rates at 57% in March after the statistic, while this figure peaked at 66% on Thursday.
Sabrina Sadgui – ©2024 BFM Bourse