SH: US pre-open: Weak employment report sends Treasuries surging
LONDON (SHARECAST) - The release of a far weaker than expected non-farm payrolls reports Stateside is sending treasury yields surging higher, at the same time that it has knocked the US dollar off its perch although perhaps not for too long.
US non-farm payrolls only rose by 69,000 in May, well below the 150,000 expected by the consensus. At the same time the length of the average work-week decreased slightly and earnings came in under expectations.
As can now be heard on the either side of the Atlantic (or the Pacific for that matter) there are now calls for further stimulus. One such voice is that of the President of the Federal Reserve Bank of Boston, who now espouses that the central bank ought to increase the duration of its so-called operation ‘twist’.
For their part, economists at Barclays are saying that it was, "a clearly soft report that suggests a loss of momentum in the labor market recovery across jobs, hours worked and the unemployment rate. The likelihood of further monetary policy easing has risen appreciably, in our view."
Meanwhile, and in company news, Chrysler has unveiled a smaller than forecast increase in like-for-like sales in the US during the month of May, of 30% (Forecast: 40%).
Verizon is to acquire Hughes Telematics for $612m.
10 year US Treasuries are now rising by no less than 29/32 dollars, with yields at an amazingly low 1.47%.
