Wall Street: doubts set in after jobs report
(CercleFinance.com) - Wall Street is set to open lower on Friday after last month's rebound in job creation dampened hopes of a rapid interest rate cut by the Federal Reserve.
Half an hour before the opening, futures contracts on the major New York indices lost between 0.1% and 0.4%, heralding a session start in the red.
The Labor Department announced this morning that the US economy had created 199,000 non-farm jobs in November, compared with economists' average forecast of around 150,000.000 non-farm jobs in November, compared with the average economist forecast of around 150,000.
'However, this is due to the fact that a large number of strikes have ended', pointed out Commerzbank's analysts.
While this data testifies to the robustness of the US economy and dispels fears of a recession, the fall in the unemployment rate could dissuade the Fed from lowering interest rates any time soon.
According to the CME Group's FedWatch barometer, the market now sees the probability of a 25 basis point rate cut at the end of the March meeting as down to 47%, compared with 55% yesterday.
On the bond market, the yield on 10-year Treasuries - which has been losing ground since the end of October - rose again after the statistics, to over 4.23%.
Similarly, the dollar strengthened against the euro, pushing the European currency back below $1.0760.
Investors are now awaiting the University of Michigan's Household Confidence Index, forecast at 62 in December compared with 61.3 last month, a statistic with the disadvantage of being notoriously volatile and unpredictable.
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