Strong Jobs Data Influences Market Outlook
UBS Global Wealth Management's latest report highlights that despite the stronger-than-expected January jobs report, the Federal Reserve is still expected to maintain its rate-cutting path in the coming months. Mark Haefele, Chief Investment Officer, stated that UBS's baseline scenario forecasts 25 basis point cuts in both June and September.
Market Reaction and Adjustments
Data from the London Stock Exchange shows that after the nonfarm payrolls report, market expectations for the total rate cuts this year were reduced from 60 to around 50 basis points, with the timing of the first cut pushed from June to July. This shift reflects a more cautious stance on the pace of inflation easing.
Asset Allocation Insights
- Equity markets may benefit from a lower interest rate environment
- Bond prices could rise as interest rates decline
- Gold, as a safe-haven asset, may also receive support