- Stocks fell and the dollar rose for a sixth day as Treasuries continued their falls, headed for the largest weekly retreat since October due to anticipation that a strong labour market may postpone Fed interest rate decreases.
- In anticipation of the US nonfarm payroll report, which is predicted to show that employers added 175,000 jobs last month—albeit at a slower rate than in November—traders will be looking for further proof that bets on looser monetary policy have gone too far.
- A week ago, swaps traders nearly fully priced a rate drop by the Fed by the Fed's March meeting; currently, they see a possibility of about 65%.
- Consequently, investors are retreating from several of the most well-liked transactions from the previous year. The yield on 10-Yr notes has returned above 4%, and futures on the tech-heavy Nasdaq 100 Index fell 0.4% on Friday. The index has lost over 3% this week.
- Money Markets scale back bets on ECB rate cuts, now pricing in 147 bps for 2024 from around 165 BPS early on Thursday.
- Traders trim BoE rate-cut bets, seeing fewer than 125 BPS this year.
