Investing.com - European markets are in the red this Friday, after yesterday's falls on Wall Street and this morning in Asia. Today, the focus is on the US employment report for the month of June, which will be released at 14:30 Spanish time.
It is expected that 225,000 new non-farm payrolls will be created (less than the previous month) and that the unemployment rate will remain at 3.7%.
These data "will determine the weekly closing trend that stock markets adopt", Link Securities says.
"The best thing for the markets is that the figures come out very much in line with analysts' consensus expectations. In that sense, yesterday we saw how badly investors reacted to overly positive ADP numbers," the analysts explain.
"Yesterday's very strong ADP private employment report (more than twice as strong as expected) has increased uncertainty/volatility and the probability that the Fed will decide to hike again in July," say Bankinter (BME:BKT).
"A private employment ADP of 497,000 'vs' 225,000 estimated and 267,000 previous, and even as the number of JOLTS vacancies was in line with expectations (9.8m 'vs' 10.3 previous), but at levels still clearly above the number of unemployed. Adding to a resilient labour market was the strong rebound in the services ISM, well above expectations (53.9 'vs' 51.2 estimated and 50.3 previous). With such a strong labour market and services sector, it seems difficult to bring inflation back to its 2% target", agree Renta 4 (BME:RTA4).
"We don't think that investors will like the lower-than-expected figures either, as they will only complicate the already uncertain macroeconomic scenario facing listed companies", they point out at Link Securities.
"We will also have to keep a close eye on the monthly and year-on-year change in average hourly earnings (wages), a variable that is closely related to inflationary pressures in many sectors of activity and which has been moderating in recent months, although not enough for the Fed to be satisfied," they add.
Renta 4 is of the same opinion: "After yesterday's data, +25 bp probabilities for the Fed on 26 July (>90%) increase, with IRRs rebounding strongly (+17 bp in the 2-year to 5.12%, exceeding 5% for the first time since before the US regional banking crisis last March, and +15 bp in the 10-year to 4.08%) and increasing fears of a monetary policy error that excessively slows the economy (sharp inversion of the yield curve)", these analysts warn.
(Translated from Spanish using DeepL)
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