Equity markets on international stock exchanges remain under pressure and bond yields rise following the announcement of solid employment growth in the United States, which supports the scenario of an upcoming sharp hike in Reserve rates federal. This decline in the equity markets is explained by the announcement of 263,000 job creations in September in the United States, a figure higher than expected, and a decline in the unemployment rate to 3.5% while the Archyde.com consensus. As far as wages are concerned, they only increased by +0.3% in September (lowest rate since December 2021) and +4.98% over 12 months. This is the 18th month in a row where inflation is rising faster than wages: the loss of purchasing power of Americans is inexorably worsening. The US Federal Reserve should therefore continue to raise its key interest rates in the coming months.
The reception was not good, neither for bonds in the US (T-Bonds took +8pts to 3.90%) nor in Europe: French OATs fell by 12pts to 2.803%, Bunds by 12pts towards 2.200%… and Italian BTPs by +20Pts to 4.700%. In the UK, Gilts are up +10Pts towards 4.2600% as the Bank of England says it will continue its rate hikes ‘no matter what’. New York Fed President John Williams said the US central bank still had work to do to bring down inflation and sustainably rebalance economic activity, warning that unemployment was most likely to rise in the process. .
The oil market meanwhile continues to rise supported by the decision of the OPEC + countries to cut their production by two million barrels a day in November – the largest reduction since 2020 – despite fears of recession and the rise interest rates.
