John Hancock: Weekly Market Recap Week Ended June 7

Labor market resilience

May’s jobs growth figure of 272,000 came in well above most economists’ forecasts for around 180,000 and wage growth also exceeded expectations, further complicating the outlook for a potential interest-rate cut this year. Government bond yields rose following Friday morning’s report and stocks were little changed.   

Yield volatility

The yield of the 10-year U.S. Treasury bond fell on Thursday to its lowest level in more than two months, but the yield drop quickly reversed course in the wake of Friday’s stronger-than-expected jobs report. After closing on Thursday at 4.28%, the 10-year note’s yield climbed to 4.43% on Friday. 

Europe’s rate cut lead

As the U.S. Federal Reserve considers whether to begin cutting interest rates later this year, the European Central Bank approved its first such reduction since 2019. Policymakers cited recent progress in reducing inflationary pressures as they approved a quarter-point rate cut affecting the 20 countries that use the euro currency.

Busy week ahead 

The new week will bring a U.S. Federal Reserve policy meeting that concludes on Wednesday and an inflation report set to be released that morning. The Fed is widely expected to keep interest rates unchanged; the Consumer Price Index report will show how May’s annual inflation rate compared with April’s 3.4% figure.

Source: https://wmr.jhinvestments.com/