Stocks Retreat As Nonfarm Payrolls And Wage Inflation Increase

US nonfarm payrolls came in well above expectations (216K vs street 170K). The wage inflation components US average hourly earnings (4.1% vs previous 4.0%), and Canada average hourly wages (5.7% vs previous 5.0%) may also attract scrutiny from investors. Canada jobs were disappointing (0.5K vs street 13K).

With the US job market still robust and wage inflation starting to accelerate again, it appears that the dovish expectations for monetary policy following the last Fed meeting may have been overdone and markets are now correcting. The US 10-year treasury note yield has blasted back up through 4.00%.

US index futures were already sliding this morning and were down about 0.3% before the news. In the last few minutes, losses have accelerated and the three main index futures contracts are now all down about 0.6%. Over in Europe, the Dax, CAC and FTSE are down 0.7%-1.1%.

 Meanwhile, the US Dollar continues to get a boost from rising traded interest rates with gains of 0.3% to 0.7% against Gold, Bitcoin, Copper, the Pound and the Euro so far today. The Loonie is holding up a bit better with a decline of 0.2%. Energy action is mixed with Crude Oil up 1.2% and Natural Gas down 3.8%.  

Another round of economic reports are due at 10:00 am EST today including US ISM Services PMI (street 52.6), Canada Ivey PMI (previous 53.2) and US Factory Orders (street 2.1%).

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