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Global shares rise, U.S. dollar falls after strong jobs data

  • S&P 500 and Dow trade up
  • U.S. dollar falls
  • Benchmark 10-year yields edge higher
  • Safe-have gold rallies

NEW YORK, Nov 4 (Reuters) – Global shares rose while the U.S. dollar fell on Friday after better-than-expected jobs data provided clues the tightness in the American labor market was starting to ease, raising hopes the Federal Reserve could soften its stance on interest rates.

Data from the Bureau of Labor Statistics showed the U.S. economy generated 261,000 jobs in October, which was higher than an estimate of 200,000, according to a Reuters poll of economists. However, the data also showed some easing of labor market conditions, with unemployment rising to 3.7% from 3.5% in September while wage inflation dropped to 4.7% from 5% in the prior month.

“The report was bad as far as what the potential implications would be for Fed policy, but it wasn’t as bad as the market was concerned about. We definitely are seeing some early signs of pricing pressure coming down,” said Tom Plumb, portfolio manager at Plumb Balanced Fund in Madison, Wisconsin.

The MSCI index of global shares (.MIWD00000PUS), which tracks equities in 50 countries, broke two straight days of losses and was up 3.05%. European stocks (.STOXX) also rallied 1.85%, a day after falling on new rate hikes from the Bank of England and the Fed.

On Wall Street, the benchmark S&P 500 was trading slightly higher, driven by stocks in financials, consumer discretionary, materials, and industrials.

The Dow Jones Industrial Average (.DJI) rose 0.18% to 32,058.83, the S&P 500 (.SPX) gained 0.10% to 3,723.67 and the Nasdaq Composite (.IXIC) dropped 0.15% to 10,327.19.

Benchmark U.S. 10-year Treasury yields rose, with the notes at 4.1689%.

“Even though the Fed would not talk about a pivot or anything like that, I think the market is expecting them to remain data dependent and in the next six months you’re going to see significant cracks in the pricing pressure,” Plumb said.

The U.S. dollar slumped after the employment report. The dollar index fell 1.33%, with the euro up 1.43% to $0.989.

Safe-haven gold jumped more than 2% as the dollar fell. Spot gold added 2.6% to $1,670.79 an ounce, while U.S. gold futures gained 2.90% to $1,674.50 an ounce.

Reporting by Chibuike Oguh in New York
Editing by Chris Reese

Our Standards: The Thomson Reuters Trust Principles.

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