(CercleFinance.com) – Wall Street is expected to open lower on Thursday morning after the publication of employment figures confirming the strength of the labor market, which has investors fearing a continuation of the tightening of monetary policy by the Fed.
Half an hour before the opening, the futures contracts on the major New York indices lost between 0.6% and 0.8%, announcing a start to the session in the red.
Market participants learned an hour before the opening that registrations for unemployment benefits fell by 19,000 during the week of December 26, to 204,000 against 223,000 the previous week.
According to the Department of Labor, the moving average over four weeks – considered a better indicator of the underlying trend of the employment market – shows for its decline from 6750 to 213.750.
A few minutes earlier, the human resources services firm ADP had announced that the American private sector had created 235,000 jobs in December, a figure well above expectations.
Faced with a labor market still under tension, investors are saying that the Federal Reserve has no other choice but to continue raising its key rates and reducing its balance sheet, at the risk of precipitating the economy into recession. .
Some analysts are coming to fear that the continued tightness in the labor market, which is fueling wage increases and thus inflation, will push the Fed to keep rates in restrictive territory until 2024.
“The Fed has achieved almost all of its objectives,” recalls Philippe de Gouville, CEO and co-founder of Ismo. ‘Only the labor market is not yet affected,’ he continues.
“With more than 5% wage inflation in 2022, which is incompatible with inflation of 2%, the Fed cannot yet loosen its grip”, warns the boss of the application dedicated to investments in the financial markets .
On the bond market, the yield on ten-year Treasuries, which had fallen to almost 3.67% yesterday, rose back above 3.76% after the publication of these figures which show no sign of a slowdown in the market. work.
The dollar meanwhile rebounded 0.5% against the euro, around 1.0550.
The report on US employment – which will be published tomorrow before the opening of the New York Stock Exchange – looks even more decisive. Economists expect an average of 225,000 job creations in December after the 263,000 announced for November.
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