Global stocks gained on Monday, October 5, after weaker-than-expected US jobs data reduced expectations that the Federal Reserve would raise interest rates this month, while the dollar strengthened on higher Treasury yields and renewed pressure on the euro.
Japan’s Nikkei rose 2.4%, while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.2%. Trading in Asia was relatively light because markets in China and South Korea were closed for holidays.
The shift in expectations for US monetary policy followed data showing that US job growth slowed more than expected in September, while payroll figures for the previous two months were revised lower. Markets were pricing an 18% chance of a Federal Reserve rate increase in October, down sharply from 64% a week earlier.
In Europe, the euro fell to a 17-month low of $1.1160 before recovering slightly, pressured by concerns over France’s rising debt and political uncertainty. The spread between French and German 10-year bond yields has also widened, increasing investor concerns about the country’s fiscal position.
The dollar index rose 0.3% to 102.217, while Brent crude traded around $102.59 a barrel. Gold also gained, rising 0.4% to $4,160.30 an ounce.
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