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Tag: economy

  • Westpac IQ – Morning Report 20251121

    Key themes:

    • Markets opened on a broadly positive note, buoyed by NVIDIA’s consensus-beating earnings. However, the rally proved short-lived as concerns about stretched technology stock valuations resurfaced.
    • The release of US payrolls data for September surprised to the upside with 119k new jobs, prompting investors to consider the likely next FOMC policy move very carefully.
    • The S&P 500 gained around 2% in early trading, but trended downwards to finish the day 0.9% lower. US Treasuries rallied despite the stronger payrolls figure, with the market apparently focusing more on the uptick in the unemployment rate.
    • Australian government bond yields also climbed by 5bp at the 10Y point, as RBA Assistant Governor Sarah Hunter reiterated the RBA’s view that the Australian labour market remains a little tight.

  • US economy adds 119,000 jobs in September but unemployment hits four-year peak // Figure complicates Fed decision on rates next month

    (FT)

    • September Job Additions: The US added 119,000 jobs, surpassing economist expectations of 50,000 and reversing August’s revised loss of 4,000 positions after downward adjustments to prior months.
    • Unemployment Rate Increase: The rate climbed to 4.4 percent from 4.3 percent, marking the highest level since 2021 amid the first Bureau of Labor Statistics report following the government shutdown.
    • Mixed Economic Signals: Strong hiring data supports Federal Reserve hawks favoring steady rates, while rising unemployment aids doves pushing for cuts to support the labor market.
    • Fed Rate Decision Outlook: A December interest rate cut faces 50/50 odds, complicated by internal divisions between inflation risks and labor needs, with two 0.25 percentage point reductions already this year.
    • Market Reactions: US Treasury yields and the dollar declined after the report, as stock futures rose, with the S&P 500 poised for a 1.6 percent opening gain.
    • Survey Discrepancies: Unemployment figures derive from household surveys, contrasting with business surveys showing robust hiring, highlighting conflicting labor market indicators.
    • Shutdown Impacts: The federal government shutdown delayed data collection, preventing an October jobs report and forcing inclusion of some data in November’s release, further clouding Fed deliberations.