NFP confirms rate rise expectations

The FTSE has once more ended up in the red, despite staging a late recovery. Meanwhile, the US jobs report provides the final piece in the jigsaw for a Fed rate rise.

•       FTSE in the red despite late rally
•       US jobs point to rate rise
•       Goldilocks moment finally arrives for Yellen

The FTSE has seen yet another day in the red, despite a resurgence into the close following a surprise fall in US unemployment. European markets have clearly been underperforming against their US counterparts, as the fears of what may come from Sunday’s Italian referendum have played havoc with investor confidence.

Today’s US jobs report marks the final piece in the jigsaw for the Fed, who are widely expected to raise rates later this month. With market expectations of a rate rise currently at 100%, it was always going to need something pretty cataclysmic to shake that confidence. With payrolls largely in line and unemployment tumbling to a nine- year low, it seems a rate rise is nailed on when the committee meet in two weeks’ time.

In a year when the Fed speculated we would see five rate rises, it seems that December will once more represent the month of choice for the FOMC. From the EU referendum and US election, to stock market weakness and unstable jobs data, the Fed has always found a reason to remain planted at 0.5% this year. However, with all the hurdles seemingly out of the way and a steady jobs market, it seems we have finally found that Goldilocks moment that Yellen and co have been waiting for.