(CercleFinance.com) – The week had started well, with a return to a form of serenity ahead of the central bank announcements: yields fell gently before then after the decisions of the central banks – the Fed and the ECB – which been well digested, including their restrictive approach.
But this last session of the week erased 90% of the gains accumulated on the bond in 72H: the deterioration accelerated with the ‘NFP’ with yields which jumped by +7Pts (OAT at 2.87%, Italian BTPs at 4.194%), +8pts (Bunds at 2.28%) and +10pts (on US T-Bonds at 3.45%).
Yields jumped on the back of the surprisingly strong US jobs numbers.
The US economy has indeed generated 253,000 non-farm jobs in April, according to the Department of Labor, a number higher than market expectations (+160,000), and even that of Jefferies which expected up to 185,000.
The unemployment rate in particular fell by 0.1 point to 3.4% (the lowest since 1969, the consensus was expecting +0.1% to 3.6%), the participation rate in the employment remained stable at 62.6%, a level 0.7 points lower than in February 2020, and average hourly income increased at an annual rate of 4.4% (vs. 4.2% expected) , which is much stronger than expected.
This conceals the downward revision of hirings over the previous 2 months, from 326,000 to 248,000 for February and from 236,000 to 165,000 for March, i.e. a total revision balance of -149,000 for these 2 months
Investors had also taken note of the figures for industrial production in France and then retail sales in the euro zone, which will inform them of the reality of a recessionary threat on the Old Continent.
In March 2023 in France, production fell back over one month in manufacturing industry (‑1.1% after +1.3%) as in industry as a whole (‑1.1% after +1, 4%), according to data corrected for seasonal variations and working days from INSEE.
In the EU in March 2023, the volume of seasonally adjusted retail trade fell by 1.2% in the euro area and by 1.1% in the EU, compared to February, according to estimates. from Eurostat.
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