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Prior To US Job Statistics, International Equities And Bonds Become Wary

Dallas Job Fairs 2023 Open Doors to New Opportunities: Check Out Here! (Photo: Tennessee Star)
Dallas Job Fairs 2023 Open Doors to New Opportunities: Check Out Here! (Photo: Tennessee Star)

In front of significant U.S. jobs data, global markets faltered during their first weekly loss since October. The advance had been fueled by expectations that the U.S. Federal Reserve and the European Central Bank would slash interest rates.


(Photo: Dreamstime)

After five weeks of advances, MSCI’s broad measure of global stocks closed flat and was headed for a weekly loss of 0.1%.

On Friday, investors in government debt also became more cautious as the yield on the 10-year Treasury note increased by 5 basis points (bps) to 4.1797%. German Bund yield increased by 5 basis points to 2.24%.

According to data on non-farm payrolls in the United States that is anticipated later on Friday, employers added 180,000 positions in January. Analysts cautioned that traders may reduce their projections for more than 125 basis points of rate cuts by the Federal Reserve in 2019 if there is an upside surprise.

The U.S. S&P 500 was expected by futures to stagnate in early New York trading.

But Friday saw a 0.6% advance in Europe’s Stoxx 600 share index, marking the start of a fourth straight week of gains as risk appetite persisted despite a significant drop in the bloc’s inflation rate.


The markets are bracing for rate cuts by central banks as early as March of next year, despite the fact that economists do not see substantial recessions in the US or the Eurozone.

At 13.1, the VIX, a gauge of implied volatility on the S&P 500 that represents investor fear of stock market corrections, is nearly at its lowest level since before the early 2020 COVID-19 shock.

Meanwhile, investors’ speculation that the ultra-dovish Bank of Japan was getting closer to tightening monetary policy put the Japanese yen on course for a fourth weekly gain on Friday.

After rising from a nearly 30-year low last month, the yen was expected to gain 1.72% this week after gaining a similar amount the week before. It was now trading at 144.28 per dollar.

“The direction is not a surprise,” stated Bart Wakabayashi, manager of State Street’s Tokyo division. “But this move and the speed of this move have blown away my expectations.”

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