Home Money MARKET REPORT: Bumper US employment dents hopes of an interest rate cut

MARKET REPORT: Bumper US employment dents hopes of an interest rate cut

by Elijah
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Bumper numbers: Nonfarm payroll costs — a key measure of the number of working Americans — rose by 303,000 in March

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Global stock markets came under pressure yesterday as high US job figures dented hopes for early interest rate cuts.

Nonfarm payrolls — a key measure of the number of Americans working — rose by 303,000 in March.

That was a setback for the increase of 200,000 that economists had expected.

The figures suggested the US economy is still in good shape – and cast further doubt on how quickly and by how much the Federal Reserve will cut interest rates. The yield on ten-year US government bonds – known as Treasuries – rose above 4.4 percent for the first time this year.

Bond yields are an important measure of the cost of borrowing and reflect market expectations of the interest rate outlook.

Bumper numbers: Nonfarm payroll costs — a key measure of the number of working Americans — rose by 303,000 in March

Bumper numbers: Nonfarm payroll costs — a key measure of the number of working Americans — rose by 303,000 in March

Fears that interest rates in the world’s largest economy could remain higher for longer hit global stock markets. In London, the FTSE 100 fell 0.8 percent, or 64.73 points, to 7911.16 and the FTSE 250 fell 0.7 percent, or 147.25 points, to 19725.94.

The European indexes also went into the red: the French Cac 40 fell by 1.1 percent and the Dax, the most important German benchmark, lost 1.2 percent.

In New York, stocks rose after plunging in the previous session as investors were spooked by warnings from a senior Fed official that rate cuts may not happen at all this year.

Sophie Lund-Yates, chief equity analyst at Hargreaves Lansdown, said: ‘Not only does this make the fight against inflation more difficult, it puts a potential pin in the hope of a rate cut in June.’

Oil rose above $91 a barrel for the first time in almost six months as tensions rose in the Middle East. But travel stocks moved in the opposite direction on concerns about the potential impact an escalation of the war between Israel and Hamas could have on flights.

1712371660 646 MARKET REPORT Bumper US employment dents hopes of an interest

1712371660 646 MARKET REPORT Bumper US employment dents hopes of an interest

British Airways owner IAG fell 2.8 percent, or 4.85 cents, to 171.7 cents, cruise line Carnival lost 3.3 percent, or 37 cents, to 1,072.5 cents, budget plane EasyJet lost 1.9 percent, or 10.6 cents, to 559.2 cents and holiday company Tui fell 1.8 percent, or 12 cents, to 652.5 cents.

Argo Blockchain, which mines Bitcoin, said daily production in March was 5 percent higher than the month before. And monthly revenues rose by 55 percent to £5.5 million.

However, shares fell 3.9 percent, or 0.5p, to 12.25p as the price of bitcoin fell. Ocado led a sell-off among retail stocks after analysts at investment bank Morgan Stanley downgraded the online grocer. Shares fell 9 percent, or 37.5p, to 379.7p.

Trainer and sports fashion retailer JD Sports also fell 4 percent, or 5.3 cents, to 126.25 cents, and Kingfisher, the owner of B&Q and Screwfix, lost 2.9 percent, or 7.1 cents, to 242.4 cents.

Credit scorer Experian is buying Australian and New Zealand rival Ilion for up to £420 million. The deal should be completed in the second half of this year. Experian shares fell 0.3 percent, or 10p, to 3391p.

Pinewood Technologies – formerly known as Pendragon – is looking to return £358m to shareholders after selling its UK car and leasing business at the end of January.

Shares in the company that supplies software to car dealers rose 1.8 percent, or 0.7 cents, to 39.6 cents.

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