US: A bit strange market reaction to NFP – Nordea
The strong labour market report led to lower longer-term bond yield and falling equities but analysts at Nordea think the reading has not caused too much disappointment.
“Nonfarm payrolls increased 225k in January, up from an upward-revised 147k in December.”
“The unemployment rate rose to 3.6% from 3.5% and the broader U6 unemployment rate rose to 6.9% from 6.7%, and hence not all the people that returned to the labour force were able to immediately get a job.”
“Average hourly earnings rose 0.2% m/m, slightly slower than anticipated, but due to revisions it increased to 3.1% y/y from an upward-revised 3.0% y/y in December.”
“We view today's numbers as strong and they should dent market expectations of more Fed easing.”
“Markets reacted with lower longer-term bond yields and falling equities, which seems a bit strange given the strong labour market report but we still doubt that this labour market report has led to much disappointment.”