Economy

US jobs shock leaves traders reeling as hopes of interest rate cut sink


Thanks for joining me. We begin with data showing house prices stalled between April and May.

Average property values fell by 0.1pc over the month to £288,688, the Halifax house price index showed.

5 things to start your day 

1) British tech tycoon Mike Lynch cleared in $11bn US fraud trial | A San Francisco jury have aquitted the man dubbed Britain’s Bill Gates in the end of a 13-year legal saga

2) Britain more reliant than ever on imported power to keep the lights onFrance to plug gaps during bad weather as UK faces first winter without coal-fired backup

3) Greek industrialist plots launch of new British energy company | Evangelos Mytilineos’s Metlen plans to rival Octopus after listing on London stock market

4) No end in sight for Britain’s worklessness crisis, warns CBITrade body says failure to address rise in long-term sickness will prolong recovery

5) Britain’s pothole crisis to deepen as councils battle £6bn funding gap | Rising costs and growing demand for services drives budget shortfall for local authorities

What happened overnight 

Stocks and bonds lost steam on the eve of a key US jobs reading that will help shape the outlook for the Federal Reserve’s next steps.

Equities stalled near all-time highs as traders refrained from big bets ahead of the data. 

Hong Kong’s Hang Seng index declined 0.6pc to 18,367.73, and the Shanghai Composite index was down 0.4pc to 3,036.08.

It came as China trade data showed that exports in May rose faster than expected at 7.6pc compared to the previous year, while imports were weaker than market forecasts.

Japan’s benchmark Nikkei 225 edged 0.1pc lower to 38,661.04 after Friday data showed the household spending figures in April were up 0.5pc year-on-year. 

This is the first increase since February 2023, a key indicator to assess the country’s economy as central bank officials prepare to hold the policy meeting next week.

Australia’s S&P/ASX 200 climbed 0.4pc to 7,853.40. South Korea’s Kospi added 0.8pc to 2,709.63.

The S&P 500 was little changed on Thursday after notching its 25th record in 2024. 

US 10-year yields fluctuated near 4.29pc. Swap markets continued to pencil in the start of the Fed rating cut in November, with a strong likelihood of another reduction in December.

The euro rose as the European Central Bank raised inflation forecasts after cutting rates.

Options traders are raising bets that bitcoin will reach a record high by the end of the month with optimism for US interest rate cuts and inflows into exchange-traded funds rising. 



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