Börse & Märkte

US labour market thaws in February

US nonfarm payrolls for Feb just hit the taper. 175k jobs created by the US economy last month and the unemployment rate edged up 6.7% from 6.6% - the headline jobs generation figure beat market expectations of 149k and the unemployment rate to stay steady.

Upward revisions to the month of January and December, 25k more jobs added in those months. Labour force participation at 63%, a little better than expected. That said, around 601k unable to work due to bad weather [unemployment rate ticked up] – that was the big question heading into this report, if indeed, the bad weather in the US can be blamed for the slowdown in jobs growth – it still can, but perhaps not as pronounced as some thought with the Feb., report suggesting that momentum did pick up despite the severe weather conditions in the US

Overall, a respectable report from the US, snapping weeks of poor economic data readings, particularly from the labour market, priming some in the market to think that the Fed can no longer justify further tapering in the face of deteriorating US economic fundamentals. They can, and they will however, as the Fed factors in the poor weather and the unemployment rate is still at a level deemed comfortable to pursue further unwinding of QE.

The Fed will continue to cut the bond buying programme, another $10billion this month, unlikely to U-turn on policies and remaining highly dovish under Yellen. This report will play into the hands of the Fed after the central bank attributed the slowdown in the US to the weather conditions, expecting a pickup as weather conditions improve and this report certainly suggests conditions are not as worrying as some had thought.

Businesses are continuing to hire; Lowe’s and Amazon plan further to generate more jobs this year – consumer spending improves due to income growth. US policymakers averted another government shutdown this year and the debt ceiling as been raised until next year so fiscal uncertainty is out of the way. Monetary policies to remain highly accommodative for now with Yellen continuing to beef up forward guidance during the year and numbing the market to piecemeal reductions to QE until it ceases to exists by the end of 2014.

Market Reax: US stock futures rally; S&P500 broke another record high and now looks well on its way to kiss the 1900 mark in coming days – European markets not doing much, responding to regional dramas such as the Ukraine tensions. Gold takes a huge drop, down around 17 bucks. USD of course winning over other currencies and US 10-year yields spike.