New record in global markets

While global markets focused on US nonfarm payrolls data, new records were reached in stock markets. MSCI World Index reached new record level. Global stock markets rose to record levels ahead of critical US nonfarm payrolls data. MSCI World Index broke a record with the support of a series of data from the US. In Asia, Japanese Topix index also saw intraday record level while Korean stocks rose with Samsung balance sheet. US stock futures are slightly higher in the morning. Bonds maintain their calm course ahead of nonfarm payrolls data. US 10-year bond yield is at 4.359 percent. Bloomberg Dollar Index is trending 0.1 percent down due to the strengthening of sterling. Eyes on US nonfarm payrolls data It is expected that the employment data to be released in the US will reflect a slowdown in nonfarm payrolls and a cooling in wage increases. According to median expectations reflected in Bloomberg survey, US economy created 190 thousand net nonfarm payrolls in June. This data was realized as 272 thousand in May. Average hourly wages are expected to rise by 3.9 percent annually, the lowest level in three years. The unemployment rate is also expected to remain at 4 percent, the highest level in more than two years. If expectations come true, this gradual cooling in the labor market could strengthen the Fed’s scenario of two rate cuts this year. Investors are also predicting two rate cuts in the futures market, in September and December. “While the headline employment data suggests the Fed should be patient, the rise in the unemployment rate signals greater urgency. We believe the Fed will have more evidence to start cutting rates at its September meeting,” economists at Bloomberg Economics said.