Good data from US investors zdołowały – Banker

“Good news, bad news” – Wall Street up too
 well assimilated the golden maxim of modern media. Surprisingly -
 but only apparently – good data from the US labor market caused a veritable
 panic in the financial markets.

 

With a monthly report of the Office of Labor Statistics markets
 Financial hardest react to a single number: the change in employment in sectors
 non-agricultural ( non-farm payrolls ). And this turned out to be a much
 better than most economists forecast, indicating
 an increase in the number of jobs by 295 thousand. compared to the expected 240 thousand.
 In addition, the unemployment rate fell from 5.7% to 5.5%, its lowest level
 since June 2008.

 

Few people looked at the survey (only 96 thousand.
 employees) did not confirm the optimistic conclusions from official data. That
 wages are still standing in place and that the activity rate recorded
 the second lowest result since 1978. It was all irrelevant, it was important that
 Only media message: that it is “good” data, and that they will encourage the Fed to increase
 interest rates.

 

A higher interest is bad news for Wall Street. It’s more expensive
 credit and a higher discount rate, which translates into lower valuation of the shares and
 bonds. Dow Jones, Nasdaq and S & amp; P 500 lost after more than 1%, which
 połączniu of cosmetic falls on Thursday gave the worst two-day rate
 the return of two months. Even more telling was the reaction of the debt market: profitability
 US 2-year bonds jumped from 0.65% to 0.73% (!). This is so,
 important if the stock index has changed its value by about 12%.

 
 
 

At the same time there has been a clear strengthening of the dollar. Euro
 weakened by 1.7% to reach
 the lowest rate since September 2003, the day breaking more
 barriers: First $ 1.10 and $ 1.09, finishing with a score of $ 1.0849.
 Received a strong blow precious metals, expressed in USD price of gold fell by
 2.6% (up to US $ 1.165 / oz. – The lowest of four months), 2% silver and platinum
 1.6%.

 
 
 

All of this is laid out in a clear scenario: investors so
 frightened by the spectrum of the first of almost 10 years interest rate rises
 USA that selling off all asset classes, fleeing to cash. Friday
 market reaction is just a foretaste of the panic that can embrace the world of finance, the
 Fed actually decides to even a very modest rate hike
 rates.

Christopher Kolany