Strong US jobs data deepens global bond sell-off

Borrowing costs rose and the pound fell to a 13-month low after the US economy beat jobs growth expectations, deepening a global bond sell-off over fears of overheating in the world’s largest economy.

The US monthly payroll figures for December came in at 256,000, far higher than a forecast of 164,000 by economists.

On the news, the dollar strengthened against major trading currencies. The pound fell by 0.7 per cent against the dollar to $1.22, the lowest since December 2023. The dollar gained 0.6 per cent against the euro to $1.02, bringing the currencies close to parity for the first time in two years.

The strength of the US jobs market makes it less likely that the US Federal Reserve will carry out major interest