Jobs Data Pushes Markets Higher
Asian markets are set to open on the front foot today after resilient jobs data in the US led to another rally on Friday on Wall Street. All three of the jobs’ prints came in better than expected with the unemployment rate dropping 0.2% to 3.7% and consumer sentiment also jumped, lifting both stocks and the dollar. The major indices all finished another good week on the up, the Dow closing up 0.36% on the day, the S&P added 0.41% and the Nasdaq gained another 0.45%. US treasury yields and the dollar also gained after the data as pricing pulled back on potential rate cuts in the new year. The benchmark 10-year gained 12 basis points and the 2-year added 15, whist the dollar index pushed 0.3% higher.
Cat Amongst the Rate Cut Pigeons
Friday’s non-Farm payrolls data has put the cat back amongst the pigeons for many market participants who were happily pushing the narrative of a rate cut as early as the first quarter of 2024. Market expectations had been sitting around the 65% level for a cut in the March meeting but that has dropped to 46% after Friday’s data release and given that stock markets had risen so strongly recently on the back of anticipated rate cuts, it was a surprise for many to see positive numbers on Wall Street at the end of trading. Traders are now looking ahead to what could be another pivotal week for US rate expectations with the key CPI data due out before the culmination of this years last Fed meeting. There is very little chance of any rate change this week from Jerome Powell and his team but what they have to say in their statement and consequent press conference could see some strong moves in markets.
Another Quiet Monday to Kick off the Week
Traders are expecting a relatively quiet Monday trading day again today as the macroeconomic calendar has little in the way of tier 1 data or central bank updates to excite markets. Expectations are for Asian markets to start on the front foot after a good day in the US on Friday which saw much better than expected employment numbers. The first two trading sessions of the day are very quiet on the risk event calendar although there is the chance of Chinese New Loan data coming out which could see further movement in Asian markets and it is not until the end of the US session and the 1-year bond auction that we have anything else scheduled to excite traders.
