Macroeconomic indicators published in the United States on Wednesday have swayed interest rates on government bonds in one direction and another.
Over the course of the afternoon, the market has repriced the probability of an interest rate cut by the US central bank for the November meeting, although according to Bloomberg, the change was still relatively moderate.
In October, the US private sector added more than twice as many jobs as expected. According to the AMD Research Institute, 233,000 jobs were created, while the forecast collected by Bloomberg expected 111,000.
For September, the reading was revised upwards to 159,000 from the previously reported 143,000.
The interest rate on the US ten-year government bond bounced up after the announcement, but fluctuated with subsequent announcements.
At the time of the review, the interest rate on the US ten-year government bond was up 0.5 percentage points, and the interest rate on the two-year government bond was up 5.8 percentage points.
Household consumption picked up
There are indications in recent macro data that the US economy is on a better-than-expected run, fueling inflation concerns.
Household consumption grew by 3.7 percent in October, the most since the beginning of 2023. The change was more than the consensus forecast of 3.3 percent and, according to Bloomberg, it was driven by the acceleration of consumption in widely different areas, from cars to furniture and entertainment.
The increase in the number of pending housing transactions in the United States clearly exceeded expectations in September. The change from the previous month was 7.4 percent, while expectations were for a 1.9 percent increase.
According to preliminary data, the core inflation of consumer prices in the third quarter slightly exceeded the expectation of 2.1 percent and reached 2.2 percent. However, core inflation moderated from 2.8 percent in the previous quarter.
Core inflation is a key reading from the point of view of central banks, as it has been cleaned of sensitively fluctuating food and energy prices.
Preliminary data on the growth of the US gross domestic product in the third quarter was also published on Wednesday. GDP grew by 2.8 percent year-on-year, while expectations were for a 2.9 percent increase. Growth slowed from the previous quarter, when the annual change in GDP was 3.0 percent.
Eurozone GDP grew more than expected
Interest rates on government bonds in the euro area were also on the rise on Wednesday.
According to preliminary information, the gross national product of the euro area grew by 0.4 percent in the third quarter from the previous quarter, while growth was expected to accumulate by 0.2 percent. Growth accelerated from 0.2 percent in the previous quarter.
According to the data published for October, consumer confidence in the euro area remained at the level of the previous month at -12.5 points, while confidence in the service sector improved slightly more than expected from 6.7 points in the previous month to 7.1 points.
On the other hand, industrial confidence in the Eurozone weakened further to -13.0 points, while it was -10.9 points the previous month. Expectations had a reading of -10.5 points.
On the foreign exchange market, the euro strengthened against all other major currencies. At 17:15, the euro fetched 1.08 dollars, 166.29 Japanese yen, 0.83 British pounds and 11.59 Swedish kronor.
The dollar, on the other hand, mainly weakened against other currencies, excluding the widely depreciating pound and the Swedish krona.
Source: www.arvopaperi.fi
