Global markets suffered losses on Monday following a strong US jobs report, which dented hopes for further Federal Reserve interest rate cuts. Oil prices also surged, driven by new sanctions targeting Russia’s energy sector.
Equity Markets Dip Across Regions
Asian and European markets mirrored heavy losses on Wall Street, where major indices dropped more than 1% on Friday.
- Key US Jobs Data: The US added 256,000 jobs in December, surpassing expectations of 150,000–160,000.
- Economic Impacts: The report, coupled with strong US services sector data, fueled expectations that the Federal Reserve might pause its rate-cutting cycle sooner than expected.
Aditya Bhave of Bank of America commented:
“Given a resilient labor market… we now think the Fed cutting cycle is over.”
European and Asian Markets
- Europe: London, Paris, and Frankfurt markets opened lower.
- Asia: Major indices in Sydney, Singapore, Seoul, and Shanghai fell, with the Hang Seng Index down 1.0%. Tokyo’s market remained closed for a holiday.
Currency Movements
- Pound: Fell to its weakest levels since late 2023.
- Euro: Dropped to a 14-month low at $1.0216.
- Dollar: Declined against the yen to 157.39.
Oil Prices Surge on Sanctions
Crude oil prices extended their rally after the US and UK imposed new sanctions on Russia’s energy sector, including Gazprom Neft.
- West Texas Intermediate: Up 1.5% to $77.75 per barrel.
- Brent Crude: Up 1.4% to $80.86 per barrel.
Analysts at SPI Asset Management noted:
“Potential supply outstripping demand remains a risk, but geopolitical factors could lead to spikes in crude prices.”
Key Figures at 0815 GMT
- Hong Kong Hang Seng: 18,874.14 (-1.0%)
- Shanghai Composite: 3,160.76 (-0.3%)
- London FTSE 100: 8,224.50 (-0.3%)
- New York Dow Jones: 41,938.45 (-1.6%)
This volatility reflects ongoing uncertainty over inflation, interest rates, and global energy markets, leaving investors wary as 2025 unfolds.