Market Live: NFP Reaction & UK Bonds Analysis

Join market live at 13:20 BST here. 

There is a packed calendar today, as US payrolls are released a day early due to  US markets being closed on Friday for the 4^th July holiday. Usually, payrolls would be the main story, however, after Wednesday’s rout in the UK bond market on the back of the welfare reform bill, UK assets will also be watched closely.

US stock markets made a fresh record high on Wednesday as we lead up to today’s payrolls report. The market is expecting a reading of 106k for last month, and the unemployment rate is expected to inch up to 4.3%, which would be the highest rate since 2021.

UK Gilt yields surged on Wednesday, and the pound sank, as the markets fretted about the possible sacking of the UK Chancellor, after the Prime Minister failed to back Rachel Reeves during a bruising Prime Minister’s questions.  But Rachel Reeves can wipe her tears, as she has the backing of the bond market. Far from weakening her position, the surge in bond yields is a warning to the PM and the Labour Party as a whole. The market does not want to see a more left-leaning Chancellor in place, and Reeves is about as ‘market-friendly’ a Chancellor as the Labour Party can hope for.