US nonfarm payrolls rose by 255,000 in July as hiring increased broadly after an upwardly revised 292,000 surge in June, the US Labor Department said. Both the S&P 500 and the Nasdaq closed at record highs on Friday.
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United States stocks notched their best day in a month. The BoE’s quarter point rate cut to a record low 0.25 percent boosted shares in Europe while sending already low global bond yields even further down with British yields hitting record lows as gilt prices rose. The Australian dollar declined against USA dollar on Friday after a surprisingly strong United States jobs report bolstered expectations of faster economic and its ability to sustain a near-term interest rate hike.
Canada’s trade gap unexpectedly widened to a record deficit in June as imports of motor vehicles and parts jumped, while the economy also surprisingly shed 31,200 jobs last month. There is still a distinct likelihood due to the ongoing external uncertainty that Gold can move higher over the medium and longer-term, although this increased optimism over the USA economy and momentum for the Dollar has taken some of the shine away from the asset as least for now.
Benchmark 10-year US Treasury yields hit a more than one-week high of 1.587 per cent, while two- and three-year yields hit one-week highs of 0.726 per cent and 0.847 per cent, respectively.
MSCI’s world stocks index.MIWD00000PUS, which tracks shares in 45 countries, was up 0.59 percent, advancing for a second straight day. The surge in the dollar and United States 10-year yields following the release would suggest investors are once again bringing forward their expectations having gone too far the other way despite the Fed repeatedly telling them otherwise. Traders now see that the Federal Reserve will raise rates in September. In early morning trading, the dollar index rose 0.5 percent to 96.223, recovering from last week’s poor showing when it fell 2 percent for its worst weekly performance since April. The report came in a week that saw the Bank of England unveil a stimulus package, while Japan and Australia took steps to shore up their economies. It was steady against the euro at US$1.1085. “The robust U.S. labour market data raise the chances for monetary policy normalization by the Fed, but uncertainties for the U.S. remain high as well”, wrote strategists at Barclays. A broad measure of the greenback extended a rebound from its weakest level since June after Friday’s report on July job growth trounced forecasts and bolstered bets that the Federal Reserve will raise interest rates this year.
Oil prices, which fell 1 percent earlier in the session, steadied to finish little changed, as short-covering returned to support the market.
US debt had climbed with European bonds in the previous session as the BOE’s move reinforced the trend for monetary easing globally.
The most-active USA gold futures for December delivery settled down 1.7 percent at $1,344.40 per ounce.
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Brent crude was down 1.42 per cent at $43.66 a barrel, while USA crude was down 1.69 per cent at $41.23.
