Monday: Fed on Hold as US Jobs Market Stabilises

The latest U.S. non‑farm payroll report showed 115,000 jobs added in April, double analysts’ forecasts, while the household survey still indicated a 226,000 job loss, painting a picture of a stabilising labour market with modest wage growth. ANZ’s chief economist Richard Yetzinger expects the Federal Reserve to keep policy rates unchanged as new chair Kevin Walsh assumes the helm in May, pushing any rate‑cut outlook further into the year. Stock indices responded positively, with the S&P 500 up 0.8% and the Nasdaq climbing 1.7% to fresh highs.

Energy markets remain volatile after the Strait of Hormuz stayed closed, sending Brent crude to $101.30 a barrel and WTI to $95.42, while the 10‑year Treasury yield slipped to 4.364%. At the same time, a second, technology‑driven shock is reshaping capital flows. Massive AI investment and data‑centre spending have lifted equity valuations, especially in the Nasdaq, and reinforced a broader rally that contrasts with the more localized tech boom of two decades ago. The combined energy and AI dynamics are forcing investors to reassess risk and sector exposure.

China’s export data for April revealed a 14.4% year‑on‑year increase, driven largely by AI‑related products, while imports surged 25.3% on higher oil and chip prices, narrowing the trade surplus to $84.8 billion. Domestic manufacturers have felt the boost, with first‑quarter profit margins rising to 5% from 4.6% a year earlier, and sectors such as IT equipment and non‑ferrous metals posting profit jumps above 100%. ANZ attributes this turnaround to the anti‑involution policy, which curbs destructive price wars and supports a shift from volume competition to profitability, a structural change that could sustain growth without monetary stimulus.