American employment continues to surprise. The ECB is expected to continue its policy of lowering rates.
American stock markets suffered at the start of the year from the continued rise in bond yields driven in particular by robust employment data.
On the other hand, the entry into office of D. Trump and the uncertainties regarding his economic program, perceived as inflationary, led to profit taking. Conversely, European stocks have rebounded after last year’s underperformance.
Bond yields thus jumped and the American 10-year gained almost 20 basis points to 4.78%. The German Bund also rose 20 basis points to 2.60%.
American employment continues to surprise with its strength, which worries stakeholders, because this calls into question the continuation of the monetary easing phase on the part of the Fed. Thus, in December, the United States created 256,000 jobs while the consensus expected only 165,000 positions. The unemployment rate fell from 0.1% to 4.1%.
The publication of inflation data, scheduled for this week, will therefore be particularly scrutinized as the probability of a further rate cut at the institution’s next monetary meeting now becomes almost zero.
The American economy shows few signs of weakness, unlike the euro zone, which is faced with sluggish demand and borrowing costs that still remain too high to stimulate economic activity.
-The ECB is expected to continue its policy of lowering rates, which will be favorable to European companies. However, the lack of visibility on the first measures of the new Trump administration, in particular the increase in customs taxes on various products imported from Europe, is weighing on stakeholders’ appetite for euro zone values.
In this context, the S&P 500 lost 1.94% and the Nasdaq fell 2.24%, while the European EuroStoxx 600 index rose 0.65% over the week.
Gold has regained its height, to 2,680 dollars despite the increase in bond yields and remains an essential asset in the current context.
This week will be marked by the start of publications from American companies, in particular those from American banks.
The essentials in brief
