(News Bulletin 247) – Wall Street is expected to continue its decline on Thursday following the announcement of a surprise drop in jobless claims, which is fueling fears that the Fed will continue to raise interest rates.

Half an hour before the opening, the ‘futures’ on the major New York indices yield between 0.3% and 1.3%, announcing a continuation of the negative trend of recent sessions.

According to the Department of Labor, the number of jobless claims in the United States fell unexpectedly by 13,000 during the week of August 28, to 216,000 against 229,000 the previous week.

Other data released at the same time show that unit labor costs increased by 2.2% in the second quarter, a figure revised sharply higher after a rise of 1.6% in the previous estimate.

These signs of the resilience of the labor market go in the opposite direction of what the Federal Reserve is looking for, namely an easing of the labor market that can ease the pressure on wages and inflationary pressures.

These data could therefore provide the US central bank with additional arguments to keep rates high for some time.

In its ‘beige book’ published yesterday, the Fed had however mentioned a slowdown in the growth of activity and prices in the United States in recent weeks, as well as an easing of wage pressures.

On the money market, the estimated probability of a rate hike at the end of the month rises to 9% against 8% the day before, according to the CME Group’s FedWatch barometer.

The upward movement in yields continues after these two statistics: the 10-year paper is still tending towards 4.30%, thus accentuating the steepening of the yield curves.

Expectations of rate hikes after the unemployment figures logically benefit, with the euro still losing ground to return to 1.07 against the greenback.

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