{"id":579384,"date":"2023-02-05T04:00:38","date_gmt":"2023-02-05T04:00:38","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/02\/05\/markets-fall-as-strong-us-jobs-data-raises-expectations-for-more-rate-hikes\/"},"modified":"2023-02-05T04:00:38","modified_gmt":"2023-02-05T04:00:38","slug":"markets-fall-as-strong-us-jobs-data-raises-expectations-for-more-rate-hikes","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/02\/05\/markets-fall-as-strong-us-jobs-data-raises-expectations-for-more-rate-hikes\/","title":{"rendered":"Markets fall as strong US jobs data raises expectations for more rate hikes"},"content":{"rendered":"

<\/a> US job growth signals further Fed rate tightening ahead: <\/strong>Interest-rate futures traders priced in further rate 25 bps hikes in March and May in light of strong jobs figures in January, Reuters<\/a> reports. The US job market grew sharply last month with the addition of more than 500k jobs prompting a drop in the unemployment rate to 3.4%<\/a>, the lowest in more than half a century. The Federal Reserve moved last week to hike rates by 25 bps to a target range of 4.5-4.75%<\/a>.<\/p>\n

The prospect of more tightening triggered a sell-off in the markets:<\/strong> Stocks, bonds, gold, oil and crypto all fell on Friday while the USD strengthened as markets reacted to the prospect of rates moving higher than expected in the coming weeks.<\/p>\n

Bad week for oil:<\/strong> Brent futures fell almost 8% during the week, including a 3.0% slide on Friday, to its lowest level since 11 January. US crude also fell 8% during the five-day period to its weakest since 5 January.<\/p>\n

Investors are worrying less about EM defaults: <\/strong>The cost of financial products that protect investors against sovereign default in emerging markets fell to the lowest in almost a year on the back of the weakening greenback and hopes that slowing US rate hikes will give developing countries more breathing room, Bloomberg<\/a> reports. An IHS Markit index that tracks credit default swaps linked to 18 EM sovereigns fell to 211 bps on Friday \u2014 the lowest level since Russia invaded Ukraine last February.<\/p>\n

Egyptian CDS have fallen back but remain elevated:<\/strong> The cost of insuring against default on Egypt\u2019s one-year t-bills is currently around 500 bps, down significantly from the peak of almost 1,800 last July but still up significantly from lows in 2021.<\/p>\n

ALSO WORTH NOTING<\/strong><\/p>\n