Nasty uncertainty prevails in the markets

Central banks have struggled to contain market anxiety over a sooner-than-expected rate-rise.

Last Friday's American payrolls report was a "cold shower" for those who hoped the US economy was finally accelerating, says The Wall Street Journal. Just 169,000 jobs were created in August and the previous two months' payroll gains were revised down. The unemployment rate declined to 7.3%, but only because a record number of people gave up looking for work and left the labour force.

The August employment report was especially important, as it was the last major statistical release before the US Federal Reserve meeting on 18 September. At this meeting, the Fed is supposed to decide whether to embark on tapering' quantitative easing (QE) reducing the quantity of various bonds it buys with printed money. Next year, with unemployment around 7%, it will end QE altogether, it has suggested. Now, given the disappointing employment data, some are wondering whether the central bank might stay its hand.

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