(Bloomberg) — Treasury yields rose while technology stocks wobbled after robust jobs data raised doubts about how quickly and deeply the Federal Reserve might begin cutting interest rates.
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The Nasdaq 100 was little changed as the tech-heavy benchmark snapped what could be its longest losing streak in over a year. Apple Inc. fell after its second downgrade this week as Piper Sandler expressed concerns about iPhone inventory. The S&P 500 rose slightly after the index ended a three-day selloff yesterday.
Ten-year Treasury bonds extended their decline and yields rose toward 4% after data showed U.S. companies increased headcount in December and jobless claims came in below estimates. Swap traders reduced their bets on Fed easing after the data.
“There was no indication in the data that policymakers should urgently begin cutting interest rates in the first quarter,” said Ian Lyngen, strategist at BMO Capital Markets.
Next, traders will look to the monthly U.S. jobs report and European inflation data on Friday to gauge whether central banks have room to start cutting interest rates.
Bets for a March rate cut are fading as the labor market remains solid and Wednesday minutes from the Fed's December meeting suggest interest rates could remain at restrictive levels “for some time.”
“If tomorrow's numbers show the same strength and the economy continues to move forward, it's fair to question why the Fed would be in such a rush to cut rates,” said Chris Larkin of Morgan Stanley's E*Trade.
West Texas Intermediate crude traded around $73 a barrel after supply disruptions in Libya and Iran said attacks were carried out in the country, killing nearly 100 people, to punish its stance against Israel
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In currency markets, the yen weakened on speculation that the Bank of Japan would find it harder to abolish negative interest rates after a strong earthquake hit the country on New Year's Day. Morgan Stanley MUFG Securities Co. this month changed its call for the BOJ's rate decision and now expects current policy to be maintained.
Important events this week:
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Eurozone CPI, PPI, Friday
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US Non-Farm Payrolls/Unemployment, Factory Orders, ISM Services Index, Friday
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Richmond Fed President Tom Barkin – a FOMC voter in 2024 – speaks on Friday
Some of the key moves in the markets:
Shares
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The S&P 500 rose 0.3% at 10:33 a.m. New York time
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The Nasdaq 100 has barely changed
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The Dow Jones Industrial Average rose 0.5%
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The Stoxx Europe 600 rose 0.5%
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The MSCI World Index rose 0.3%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro rose 0.4% to $1.0963
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The British pound rose 0.3% to $1.2707
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The Japanese yen fell 0.9% to 144.56 per dollar
Cryptocurrencies
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Bitcoin rose 2.8% to $44,140.01
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Ether rose 2.4% to $2,279.97
Tie up
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The 10-year Treasury yield rose six basis points to 3.98%
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The 10-year German government bond yield rose nine basis points to 2.12%
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The 10-year UK government bond yield rose seven basis points to 3.71%
raw materials
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West Texas Intermediate crude fell 0.2% to $72.58 a barrel
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Spot gold rose 0.2% to $2,045.89 an ounce
This story was produced with support from Bloomberg Automation.
– With support from Julien Ponthus, Alex Nicholson and Sujata Rao.
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