U.S. bonds and the dollar were on the rise on Friday following the release of the May monthly jobs report. Non-farm payrolls rose by 339,000, thereby exceeding expectations of a rise of 190,000 payrolls.
The U.S. benchmark 10-year Treasury yield rose 4 basis points to 3.6524%, however, it remains on course for a 16 basis point weekly fall. Futures on the S&P 500 gained 0.5% following the release of May’s jobs data, while contracts listed on the Nasdaq Composite Index gained 0.3%. Across the Atlantic, the European STOXX 600 index climbed 1.14%, putting it on track to a second consecutive day of gains.
Markets now price a 75% chance that the Federal Reserve will put a pause on its interest rate hikes during its next policy meeting in June, thereby preventing an 11th consecutive rate rise.
Peter Cardillo, chief market economist at the New York-based Spartan Capital Securities, believes that a rate hike pause is inevitable. “Hourly wages is the key and they came in just in line with what was expected,” Carillo explained. “In terms of the Fed, it doesn’t change the prospects of the Fed skipping in June, which means they will skip and leave the door open for a rate hike at the next meeting.”