TOKYO (Reuters) – Global stock prices rose to a 1/2-month high on Monday after data showed a rise in US employment while US bonds were under pressure due to concerns Federal Reserve could raise interest rates earlier than it had indicated.
US S & P500 futures traded up 0.3%, keeping most of the gains made during a truncated session on Friday, although Nasdaq futures, with a lot of technology, lagged behind, trading almost on the plain.
In Asia, the Japanese Nikkei rose 0.8%, while MSCI’s broader Asia-Pacific stock index outside Japan fell slightly, with China closed for the day of the sweeping the graves and Australia on Easter Monday.
The MSCI global index was almost flat, but was near its highest level since the end of February and in view of a record set this month, although trade remains slow, with much of Europe on vacation.
The U.S. Department of Labor said Friday that non-farm payrolls increased by 916,000 jobs last month, the largest increase since last August.
This was well above the average forecast of 647,000 economists and was closer to the whisper of a million. February data was also revised upwards to show 468,000 jobs created instead of the 379,000 previously reported.
“There will be more improvements in April as restaurants have started to open. People have expected economic normalization to take place sooner or later, but their pace seems to be accelerating,” Koichi said. Fujishiro, senior economist at Dai-ichi Life Research.
While employment remains 8.4 million jobs below its peak in February 2020, an accelerated recovery made it hoped that all jobs lost during the pandemic could recover by the end of next year.
In turn, the prospect of a return to full employment raises questions about whether the Fed can deliver on its promise to maintain interest rates until 2023.
Markets have strong doubts, and futures on Fed funds are fully priced in a rate hike by the end of next year.
Many market participants also expect the Fed to consider reducing bond purchases this year, although Fed officials have said it has not yet discussed the issue.
“It will be impossible for the Fed to avoid debating volume reduction until the fall,” said Kozo Koide, chief economist at Asset Management One, noting that U.S. President Joe Biden’s infrastructure spending plan it is likely to be approved by then.
The two-year US Treasury yield rose to 0.186%, close to the eight-month high of 0.194% at the end of February.
Bond yields with a longer date also rose, with ten-year bonds at 1.725% in Asia on Monday, widening the rise that began Friday after the employment report.
Strong job data helped underpin the dollar.
The green dollar traded at 110.65 yen, not far from Wednesday’s 110.97 year high. The euro stood at $ 1,1752.
Gold fell 0.4% to $ 1,724.70.
In cryptographic assets, ether fell 1.7% to $ 2,040.21 from Friday’s record high of $ 2,144.99. Bitcoin fell 0.9% to $ 57,704.
Oil prices fell, comparing the strong gains made in the previous session, driven by OPEC + ‘s decision to gradually soften some of its production cuts between May and July.
“While the market initially rose in the news, in the end it will be an increase in production,” said Tatsufumi Okoshi, a senior commodity analyst at Nomura.
The decision came after the new US administration called on Saudi Arabia, the world’s leading oil exporter, to keep energy affordable for consumers.
U.S. energy companies also added the highest number of oil rigs in a week since January 2020, as higher oil prices in recent months have caused drillers to return to the well.
US crude futures fell 1.4% to $ 60.62 a barrel, while Brent fell 1.4% to $ 63.95.
Report by Hideyuki Sano, edited by Gerry Doyle