The session ended with a sharp rise in rates following the publication of the much-anticipated monthly employment report for the United States by the Department of Labor.
The +150,000 consensus was largely exceeded with nearly +200,000, and the unemployment rate, expected to rise to 4.00%, was in fact down sharply by -0.2% to 3.7%.
Nothing was in line with expectations, including downward revisions for the previous 2 months: the consensus was for -50.000 and it was -35,000.

This much higher than expected statistic will complicate the Federal Reserve's task of recalibrating its monetary policy: the speech it will give on December 13 (final FOMC statement) could be more hawkish than Wall Street had hoped.

As a result, bonds are clearly under pressure, with the US 10-yr yield up 13pts to 4.2540%.
Consolidation is also underway in the Eurozone, with Bunds up 8pts to 2.2760% and OATs up 9pts to 2.836%... and Italian BTPs up 10pts to 4.061%.
Goldman Sachs estimates that the ECB should cut rates at every meeting from April onwards, i.e. -125Pts by the end of 2025, and -125Pts also for the FED, which could cut -25Pts per FOMC, or even 50Pts if activity weakens too much.
Across the Channel, Gilts have rallied +10pts to 4.0680%, matching the trajectory of US T-Bonds.

Japanese GDP contracted by more than expected in Q3 (-0.7%)... and the Yen's sharp rise in recent days to 144/$ will not help matters (hence a second session of -1.7% decline on the Tokyo Stock Exchange this morning, and a weekly drop of over -3%.).
The Japanese 10-year yield anticipates the tightening of monetary policy mentioned yesterday by the head of the BoJ, and broke through the 0.80% barrier (0.805% at its highest)... which remains very low in view of inflation that is permanently anchored above 3%.


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