He adds that a weak manufacturing report Thursday has been a big concern raised by the no-hike camp. USA crudewas last up $1.27, or 2.94 percent, at $44.43 per barrel. Yields reversed that drop later in the session, with two-year yields last little changed at 0.806 percent and 10-year yields last at 1.618 percent, compared with a 10-year yield of 1.570 percent late Thursday. And this one takes on major significance for investors as it the last one before the next policy meeting of the US Federal Reserve on 20-21 September.
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After the report, economists at Goldman Sachs led by Jan Hatzius boosted the probability of a Fed move this month to 55 percent from 40 percent.
There was also a sense of unease after the International Monetary Fund on Thursday said it planned to downgrade its U.S. economic forecasts in October, warning generally of a global “low-growth trap” if G20 governments meeting this weekend in China failed to act decisively and soon.
“I would not be surprised to see some Fedspeak addressing this report in coming days”, Misra wrote in response to questions asked by Bloomberg News.
In a shock corporate announcement Friday, Samsung said it would suspend sales of its latest flagship smartphone Galaxy Note 7 as reports of exploding batteries threatened to damage the reputation of the South Korean electronics giant. All is not well in the world’s largest economy!
Fed rate hike expectations reflected in futures markets were only slightly lower by the close.
Fed rate hike * Top European shares last up 2 pct * Dollar gains after hitting one-week low * Long-dated Treasury yields rise after initially falling * Oil prices last up 3 pct (Updates to open of U.S. markets; changes byline, dateline, pvs LONDON) By Sam Forgione NEW YORK, Sept 2 (Reuters) – U.S. and European shares gained on Friday after weaker-than-expected U.S. monthly jobs data gave the Federal Reserve more leeway to stand pat on interest rates this month, while the dollar gained and longer-dated Treasury yields edged up.
Oil prices rose about 2.3 per cent after the jobs report weighed on the dollar.
“There is therefore potential for markets to whipsaw should we see robust U.S.jobs data tonight, going into the U.S. Labor Day holiday weekend”. “A stronger USA labour market isn’t new news for the Fed or its watchers, rather, it is areas such as manufacturing and retail that are now causing concern, not to mention a generalised lack of inflation”. Futures traders showed little more conviction, assigning a 32 percent probability to an increase this month, barely lower than the 34 percent chance seen a day earlier. The pound fetched $1.3268 against $1.3270 in U.S. trade.
Tokyo ended flat, while Hong Kong added 0.5 percent. Wellington was marginally up and Taipei ended down.
S&P 500 e-minis were up 5 points, or 0.23 percent, with 232,341 contracts traded at 8:44 a.m. ET (1244 GMT).
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On oil markets the weaker dollar and bargain hunting helped both contracts rise, a day after diving more than three percent in reaction to comments from Russian Federation suggesting limits on output may not be necessary.
