(CercleFinance.com) – Wall Street should open lower on Friday morning, the mediocre employment statistics not being enough to give hope of a moderation in Fed rate hikes.
Half an hour before the opening, the ‘futures’ contracts on the main New York indices fell back by 0.1% on average, a harbinger of a start to the session in the red.
Employment growth slowed sharply in June, notably under the effect of retail trade, official statistics released this morning show.
The Labor Department reported 209,000 nonfarm job creations last month, while economists’ median forecast was for about 240,000 new jobs.
But the continued rise in wages and the decline in the unemployment rate seem to reflect the continued strength of the labor market.
This statistic, one of the most followed and expected by the markets, falls as Wall Street begins to be alarmed by the solidity of economic activity, synonymous with the maintenance of the restrictive policy of the Fed.
Investors believe that the ambiguity of the figures for the month of June does not rule out further rate hikes by the Federal Reserve in the coming months.
‘Even if the labor market decelerates, it is still too tight from the point of view of the Fed’, say economists at Commerzbank.
According to the CME’s FedWatch barometer, the estimated probability of a 25 basis point rate hike at the end of the month has now fallen to 92%, after reaching 95% yesterday.
A sign of investors’ caution, the recent upward movement in bond yields continues after the employment statistics: the 10-year now flirting with 4.05% to approach its annual highs.
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