Friday saw a rise in global stocks as investors speculated that the US non-farm payroll jobs growth was not as strong as anticipated. This would give the Fed additional justification to lower interest rates later in the year.
US interest rate futures were pricing in two cuts of 25 basis points each this year, possibly beginning in September, as opposed to the one cut anticipated prior to the employment data being made public ahead of Wall Street’s opening bell. The news of Apple’s record $110 billion share buyback added to the optimistic mood, driving higher US stock futures.
According to a report by the Labour Department, nonfarm payrolls grew by 175,000 jobs in April, whereas economists surveyed by Reuters had predicted an increase of 243,000 jobs. How does this look to the Fed? Premier Miton Investors Chief Investment Officer Neil Birrell says the US labour market is finally showing signs of weakness.
As a result, rate cuts will be prioritized again, and markets are likely to view this positively. Although we shouldn’t rely too much on a single data point, Birrell suggested that this might be the beginning of a trend in the Fed’s favour.
As the week came to an end and there was speculation that Japanese authorities were involved, the yen began to rise from 34-year lows, putting the dollar on the defensive. Tech and Hong Kong stocks led the way, as Asian shares soared to their highest level in 15 months on Friday.
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