MARKET REPORT: Bumper US employment dents hopes of an interest rate cut

Global stock markets came under pressure yesterday as bumper US jobs figures dented hopes for early interest rate cuts.

Non-farm payrolls – a key measure of the number of Americans in work – rose by 303,000 in March.

That smashed the 200,000 increase economists expected.

The figures suggested the US economy remains in fine fettle – and cast further doubt over how soon and by how much the Federal Reserve will cut interest rates. The yield on ten-year US government bonds – known as Treasuries – rose to above 4.4 per cent for the first time this year.

Bond yields are a key measure of the cost of borrowing and reflect market expectations of the outlook for interest rates.

Bumper figures: Non-farm payrolls – a key measure of the number of Americans in work – rose by 303,000 in March

Fears that rates in the world’s biggest economy could stay higher for longer hit global stock markets. In London, the FTSE 100 fell 0.8 per cent, or 64.73 points, to 7911.16 and the FTSE 250 slid 0.7 per cent, or 147.25 points, to 19725.94.

European indexes also sank into the red, with France’s Cac 40 sliding 1.1 per cent and the Dax, Germany’s main benchmark, losing 1.2 per cent.

In New York, stocks edged higher having tumbled in the previous session after investors were spooked by warnings from a senior Fed official that rates cuts may not happen this year at all.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: ‘Not only does this make the fight against inflation more difficult, it puts a potential pin in hopes for an interest rate cut in June.’

Oil rose above $91 a barrel for first time in nearly six months as tensions mounted in the Middle East. But travel stocks headed in the other direction due to concerns over the potential impact that an escalation in the Israel-Hamas war could have on flights.

British Airways owner IAG descended 2.8 per cent, or 4.85p, to 171.7p, cruise company Carnival lost 3.3 per cent, or 37p, to 1072.5p, budget airliner EasyJet shed 1.9 per cent, or 10.6p, to 559.2p and holiday firm Tui fell 1.8 per cent, or 12p, to 652.5p.

Argo Blockchain, which mines bitcoin, said its daily production in March was 5 per cent higher than the month before. And its monthly revenue rose 55 per cent to £5.5m.

However, shares sank 3.9 per cent, or 0.5p, to 12.25p as the price of bitcoin eased. Ocado led a sell-off among retail stocks after analysts at investment bank Morgan Stanley downgraded the online grocer’s rating. Shares slid 9 per cent, or 37.5p, to 379.7p.

Trainer & sports fashion retailer JD Sports was also on the slide, falling 4 per cent, or 5.3p, to 126.25p, and Kingfisher, the owner of B&Q and Screwfix, lost 2.9 per cent, or 7.1p, to 242.4p.

Credit scorer Experian is buying Australian and New Zealand rival Illion for up to £420m. The deal should be completed in the second half of this year. Experian shares fell 0.3 per cent, or 10p, to 3391p.

Pinewood Technologies – formerly known as Pendragon – wants to return £358m to shareholders following the disposal of its UK motor and leasing business at the end of January.

Shares in the firm that provides software to car dealerships rose 1.8 per cent, or 0.7p, to 39.6p.

This post first appeared on Dailymail.co.uk