Marketmind: Job Growth, Fed Indigestion


A look at the day ahead in the European and world Anshuman Dagger markets

There is no way to stop the Federal Reserve.

While US employers hired slightly more workers last month than markets expected, the red-hot labor market means the Fed’s aggressive monetary policy is here to stay.

New York Fed President John Williams reiterated Friday that more rate hikes are needed to bring down inflation.

Futures pricing now indicates a nearly 90% chance of a 75 basis point rate hike next month and more than 150 bps of tightening for May.

Concerns about higher borrowing costs pushed Asian stocks lower on Monday, following Friday’s sell-off on Wall Street.

Activity remains sparse, even with China reopening after a week off due to holidays in Japan, South Korea and Taiwan. [MKTS/GLOB]

Asian tech stocks fell sharply along with chipmakers, following the latest US crackdown on China’s chipmaking industry to curb Beijing’s technological and military advances.

Analysts are clearly focused on how the Fed can slow down a resilient labor market.

“What else can the Fed do to slow demand and bring inflation closer to target? How does it reduce job creation?” Rick Rieder, head of BlackRock’s global allocation investment team, asked in a note.

“One wonders at this point if Fed or government legislation toward a ban on resume software may be the only way to delay recruits from approaching potential employers.”

The employment data marked the fifth consecutive print above expectations for the series and its 10th surprise to the upside in the last 12 months.

This week will be dominated by the annual meeting of the International Monetary Fund and the World Bank, where the who’s who of finance and central banking descends on Washington.

While US inflation figures, retail sales data, consumer confidence indicators and the minutes of the latest Fed meeting are also due this week.

Charts: Nonfarm Payrolls (

Key developments that could influence markets on Monday:

Economic data: house prices in Sweden, consumer prices in Norway and Denmark

LONDON – Speech by Fergal Shortall, Director of Monetary Research, Bank of England MPC – 08:15 GMT

FRANKFURT – Opening remarks by ECB Chief Economist Philip Lane at the ECB Monetary Policy Conference – 13:00 GMT

CHICAGO, Illinois – Federal Reserve Bank of Chicago President Charles Evans speaks on current economic conditions and monetary policy – 1300 GMT

(Reporting by Anshuman Dagger; Editing by Sam Holmes)

Copyright 2022 Thomson Reuters.


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