Yingwei Financial Market Express: Strong employment will support the Fed to continue to raise interest rates sharply? Non-farm payrolls data is coming!

By    9 Jan,2023

A number of U.S. data again support the prospect of an aggressive Fed rate hike, the dollar strengthened to the detriment of gold, while U.S. bond rates moved higher and the three major U.S. stock indexes suffered setbacks.


It should be noted that the president of the Kansas Fed Bank George (Esther George) said during an interview that the Federal Reserve should raise interest rates to more than 5% and remain at this level until 2024 to reduce inflation. At the same time, Bullard said that U.S. inflation is still too high, but some indicators are falling back, 2023 may be a year to say goodbye to soaring inflation, interest rates are believed to become restrictive enough.

On Friday, the market will focus on the U.S. non-farm payrolls data, which is expected to show that U.S. jobs increased by 200,000 in December and average hourly earnings rose 0.4% in December from a year earlier and 5% from a year earlier.

European and US stock markets

Thursday there are a number of U.S. data out, known as "small non-farm payrolls" in December ADP private job growth from November upward revised 182,000, rose to 235,000, much more than the expected 150,000, December layoffs surged 129.1% year-on-year, but the rise was less than the previous month's 416.5%.

Meanwhile, the Labor Department also announced that the number of first-time jobless claims for the week ended December 31 fell by 19,000 to 204,000, lower than the expected 225,000, and the number of continuing jobless claims for the week ended December 24 also fell by 24,000 to 1,694,000, lower than the expected 1,728,000.

U.S. employment data better than expected, stimulating debt interest rates climbed, the U.S. 10-year Treasury yield once pumped up 9.17 basis points to 3.7744%; more sensitive to the interest rate of the U.S. two-year Treasury yield had jumped 12.92 basis points to 4.4826%.

As of the close, the Dow Jones Industrial Average was at 32,930 points, down 339 points or 1.02%; the U.S. Standard & Poor's 500 Index retreated 1.16% to 3808 points; the Nasdaq Composite Index fell 1.47% to 10,305 points. On the futures front, the Nasdaq 100 futures (NQZ2) are currently up 0.31%.

On the individual stock front, focus on e-commerce giant Amazon.com Inc (NASDAQ:AMZN)'s CEO confirmed Thursday that the company plans to eliminate slightly more than 18,000 jobs, including layoffs last November and streamlining workforce measures announced Wednesday, and that the company intends to begin communicating with affected employees starting Jan. 18. Shares closed down 2.37 percent at $83.12 on Thursday.

Meanwhile, news that chipmaker Western Digital (NASDAQ:WDC) and Japanese peer Armored Man (Kioxia) have restarted merger talks, with the former's shares bucking the market by 6.6%.