TanzaniaAsian Shares Fall
US jobs data and bond market swings cause uncertainty, oil prices remain high. Stocks rise after weak US jobs data, but bonds resume selling.
Global Newsflix 2 min readMajor stock indexes rose and the dollar fell on Friday as expectations for a Federal Reserve interest rate increase later this month fell after softer-than-forecast US jobs data.
Nonfarm payrolls increased by 29,000 jobs last month, the Labor Department's closely watched employment report showed, short of the expected gain of 90,000 jobs in September.
Asian shares fell on Friday as investors grappled with wild swings in bond and currency markets ahead of key US jobs data, while a widening US military buildup in the Gulf kept oil prices elevated and inflation risks alive.
The US ISM Manufacturing PMI showed a huge jump in the prices paid component, pointing to more cost pressures. Chris Weston, head of research at Pepperstone, said a hot wages print could prove particularly influential for US rates, Treasuries and the USD.
The 10-year Treasury yield rose 2 bps to 5.2495%, having dropped 6 bps overnight to ease from a 24-year high of 5.3445% as the brutal selloff finally tempted some buyers back into the market.
European bourses are set for a higher open, with pan-region stock futures up 0.2% after losses overnight. Nasdaq futures rallied 0.5% and S&P 500 futures gained 0.3%.
The rout in European bonds, with French yields hitting 14-year highs, may have also helped drive safe-haven flows back to US Treasuries, the dollar and the Swiss franc.
Key facts
- US nonfarm payrolls increased by 29,000 jobs last month
- The 10-year Treasury yield rose 2 bps to 5.2495%
- Asian shares fell on Friday as investors grappled with wild swings in bond and currency markets
- Oil prices remain elevated due to a widening US military buildup in the Gulf
Three perspectives
Neutral
The market reaction to the US jobs data and bond market swings will be closely watched. Investors are waiting to see how the Federal Reserve will react to the data. The situation is uncertain, with both positive and negative factors at play.
Positive
The rise in stock indexes and the fall in the dollar could be seen as a positive sign for investors. The increase in oil prices could also be beneficial for oil-producing countries.
Negative
The fall in Asian shares and the rise in bond yields could be a negative sign for investors. The uncertainty in the market could lead to further volatility.
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