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Treasury yields spike after stellar jobs report points to rate hike

Upbeat reports would add to bets on a December move by the Fed.

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The health of USA employment is a key to the Fed’s thinking. Markets in Southeast Asia were mostly lower.

MSCI’s all-country world index fell 0.81 percent. Dow and S&P 500 futures each added 0.4 percent. Australia’s All Ordinaries was up 21.80 points or 0.42 percent at 5,270. The unemployment rate is expected to edge down to 5 percent.

“Global production continues to remain in excess of demand and OPEC have been continuing with their policy of maintaining output levels to protect market share”. It held steady at 121.90 yen after touching a 2 1/2-month high of 122.01 on Thursday.

But it was still well up from below 120 yen in recent weeks and trading around two-month highs. Yellen did stress that no decision has been made yet and a move in December will depend on how the economy fares between now and then. “They have started smoothing the way for a December rate increase”, said Nobuo Ichikawa, group manager at Mitsubishi UFJ Trust and Banking.

It was last at $1.5169 GBP=D4, down 0.3 percent on day, while the euro was up 0.2 percent at 71.65 pence EURGBP=D4.

“With a near-term hiking cycle off the table, the rationale for being long sterling has disappeared”.

Major banks say the resulting surge against the euro and a handful of other currencies has drawn many investors back into last year’s big consensus trade of a push by the dollar towards parity with the euro.

Asian markets saw a largely subdued day despite more noises from Japan’s central bank that it is considering more stimulus amid worries about the impact on its economy of China’s current slowdown. Southwestern Energy rose 62 cents, or 5.3 percent, to $12.28 and CONSOL Energy rose 33 cents, or 4 percent to $8.45. The pan-European FTSEurofirst 300 index (.FTEU3) closed up 0.27 percent at 1,498.99, while Germany’s export-heavy DAX (.GDAXI) outperformed to gain 0.92 percent. The Shanghai Composite extended earlier gains to climb nearly 2 percent and gain 6.2 percent for the week.

LONDON – The Bank of England has trimmed its growth outlook due to slowing emerging markets, leaving London stocks in the red while eurozone stocks gained ground. Authorities ended market interventions, to conserve central bank reserves.

Brent hovered at $48.20 a barrel. The economy is expected to grow 2-3 percent in the year through June 2016 before picking up pace to 2.75-3.75 percent in the year through June 2017.

Zinc and lead touched their weakest levels in almost a month while nickel hit a six-week low as metals also felt the impact of worries about global economic growth and soggy metals demand.

Wholesale gasoline futures fell two cents, or 1 percent, to $1.487 a gallon, heating oil fell three cents, or 2 percent, to $1.361 a gallon and natural gas futures rose 10 cents, or 4.5 percent, to $2.364 per 1,000 cubic feet.

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Spot gold XAU= recovered to $1,109.4 an ounce from an eight-week low on Thursday, but it too was on track for a 2.8 percent loss for the week.

Asian stocks falter as Fed signals a December rate rise