Financial Markets Daily Report07 July 2023
In yesterday’s session, investor sentiment was soured by data showing the resilience of the US economy and its labour market. Private surveys showed that US companies added the most jobs in over a year in June, and the services sector expanded faster than expected, which investors fear will allow the Fed to continue raising rates.
- In yesterday’s session, investor sentiment was soured by data showing the resilience of the US economy and its labour market. Private surveys showed that US companies added the most jobs in over a year in June, and the services sector expanded faster than expected, which investors fear will allow the Fed to continue raising rates.
- In this context, sovereign bond yields spiked across the board, more notably in Europe than in the US, where yields ended up paring back the large hikes recorded earlier in the session. European peripheral spreads widened slightly.
- Major stock indices in the US, Europe and Asia fell in a broad sell-off, with European indices suffering more than their US counterparts. Volatility spiked, with the VIX rising 8.9%, although it remains contained by historical standards.
- Today the focus will remain in the US labour market, as nonfarm payrolls and unemployment reports will be released, which will allow investors and Fed officials a better assessment of the labour market strength.