European stocks and Wall Street futures declined and the dollar strengthened on Monday, after last week’s stronger than expected US jobs report raised the likelihood of further interest rate increases.
Data released on Friday showed the US added 517,000 jobs in January, much higher than the 185,000 anticipated by Wall Street economists, while the unemployment rate fell to a 50-year low.
The figures weighed on financial markets at the end of last week and continued to do so early on Monday. Europe’s region-wide Stoxx 600 fell 0.5 per cent and Germany’s Dax lost 0.7 per cent ahead of the release of the EU’s December retail sales figures. London’s FTSE 100, which last week hit a record-high, fell 0.6 per cent.
Ahead of the New York open contracts tracking Wall Street’s blue-chip S&P 500 and those tracking the tech-heavy Nasdaq 100 fell 0.4 per cent and 0.5 per cent respectively. US equities fell on Friday after the jobs report but gained over the week as the Federal Reserve raised its main policy rate by a quarter of a percentage point, the smallest amount since March.
“The US labour data shocked” and “makes it more probable that the Fed will keep hiking”, said Steve Englander, a strategist at Standard Chartered.
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