[Good Morning Stock Market] Strong US Employment... KOSPI Expected to See Increased Volatility

[Image source=Yonhap News]

원본보기 아이콘

On the 10th, the Korean stock market is expected to show a slight rise at the start, followed by a highly volatile trend. Although the U.S. March employment data is interpreted as still robust, it is assessed that the fallout from the Silicon Valley Bank (SVB) bankruptcy could potentially have an impact.

The U.S. stock market was closed on Good Friday, the Friday before Easter, as per tradition, but after-hours futures turned upward. This was influenced by the analysis that employment indicators, including the March nonfarm payrolls, remain strong, easing concerns about a U.S. economic slowdown.

The U.S. March nonfarm payrolls decreased by 90,000 from the previous month (326,000) to 236,000. In particular, the decline was largely due to a drop in personal services by 59,000 from 255,000 in the previous month to 196,000. Instead, sectors related to outdoor activities such as department stores (14,800), airlines (5,700), and food services (50,000) showed an increase.

The market focused on hourly wages. Hourly wages in March rose by 0.27% compared to 0.21% in the previous month. However, compared to the same month last year, they increased by 4.2%, showing a slowdown from February's 4.6% growth.

The labor force also saw a significant increase. The labor force participation rate rose from 62.5% to 62.6%. The employment-population ratio also increased from 60.2% to 60.4%. However, the unemployment rate fell from 3.6% to 3.5%. Overall, this indicates that the employment market remains solid.

[Image source=Yonhap News]

원본보기 아이콘

As a result, the U.S. dollar strengthened, and U.S. Treasury yields surged. This is interpreted as reflecting the Federal Reserve's (Fed) potential to continue its rate hike stance.

With the robust employment market easing economic concerns, the U.S. futures market also turned upward. The CME FedWatch tool raised the probability of a May rate hike from 48.4% to 71.2%.

However, there are still views that the U.S. economic slowdown issue will persist. It is explained that the employment data survey was conducted in mid-March, so the regional banking issues were not fully reflected. There is also analysis suggesting a high possibility of employment contraction. Reflecting this, financial stocks including regional banks slightly declined in after-hours trading. The decline in semiconductor stocks excluding Micron and major tech stocks also added pressure.

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.