After a difficult week and a brief foray below 7,400pts, the Paris Bourse ended the week on a high note with a +1.3% gain to 7,435, reducing the weekly decline to -0.9%: the decisions of the central banks - the Fed and the ECB - have been well digested, including their restrictive approach.
The Euro-Stoxx50 index was equally buoyant (+1.1% to 4,332), following a positive opening on Wall Street, in the wake of Apple (+4.5%).
The 3 indices averaged +1% at the start of the day, and the uptrend continued: the Dow Jones gained +1.3%, the Nasdaq and S&P500 more than 1.5%.
Given the day's post-NFP euphoria, the spectre of recession is receding in the USA, and Wall Street is applauding.

However, the markets remain very depressed (1.8 bn euros traded in Paris in 8 hours) and weakened by doubts about the ability of central banks to bring inflation back down.
And these doubts are not about to dissipate with the publication of April's NFP, with its surprisingly robust employment figures.

The US economy generated 253,000 non-farm jobs in the month of April.000 nonfarm jobs in April, according to the Labor Department, a number which exceeded market expectations (+160,000), and even Jefferies' expectation of up to 185,000.

In particular, the unemployment rate eased by 0.1 points to 3.4% (at its lowest since 1969, the consensus was for +0.1% to 3.6%), the labor force participation rate held steady at 62.6%, a level 0.7 points lower than in February 2020, and average hourly earnings rose at an annual rate of 4.4% (vs. 4.2% expected), much stronger than forecast.

This masks the downward revision of hiring in the previous 2 months, from 326,000 to 248,000 for February and from 236,000 to 165.000 for March, i.e. a total revision balance of -149,000 for these 2 months.
The impact on bonds is clearly negative, with yields jumping from +8Pts (OAT at 2.88%) to +10Pts (on T-Bonds at 3.45%).

'There is no doubt that markets are nervous at the moment, awaiting the next developments around the US regional banking crisis', explains Jim Reid, market strategist at Deutsche Bank.

In any case, the next few quarters are likely to be long, bumpy and stressful", warns the analyst.

Investors also took note of industrial production figures in France, followed by retail sales figures in the eurozone, which will tell them whether a recessionary threat exists on the Old Continent.

In March 2023 in France, production fell over one month in both manufacturing (-1.1% after +1.3%) and industry as a whole (-1.1% after +1.4%), according to Insee's seasonally and working-day adjusted data.

In March 2023, the volume of seasonally-adjusted retail sales fell by 1.2% in the euro zone and by 1.1% in the EU, compared with February, according to Eurostat estimates.

The Euro looks set to end the day unchanged against the Dollar, between 1.1000 and 1.1010... and it's the Swiss Franc that is stalling solo by -0.75% against the world's major currencies.

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