LONDON (AP) — More solid U.S. jobs data Friday reinforced market expectations that the Federal Reserve will raise interest rates this month for the first time in 9 ½ years, a development that helped shore up stock markets and the dollar.
KEEPING SCORE: In Europe, stock markets recouped some lost ground. The CAC-40 in France was flat at 4,729 while the FTSE 100 index of leading British shares was steady at 6,272. Germany’s DAX underperformed its peers, trading 0.4 percent lower at 10,750. U.S. stocks were poised for a solid opening, with Dow futures and the broader S&P 500 futures up 0.5 percent.
JOBS FOCUS: U.S. government figures showed that the country added 211,000 jobs last month, just ahead of market expectations. The unemployment rate remained at 5 percent for the second straight month as more Americans entered the workforce to look for jobs.
IMPACT: The robust hiring is the latest sign that the U.S. economy is healthy enough for the Fed to raise interest rates for the first time since June 2006 when it concludes its policy meeting on Dec. 16.
ANALYST TAKE: Simon Smith, chief economist at FxPro, said stocks markets are heading higher as investors welcome the fact that the data will help reduce uncertainty regarding the Fed’s intentions. “One of the most spoken about central bank policy events is soon to become a reality, but if you thought the Fed talk and debating is over, think again as the focus will now shift to the timings of subsequent rate hikes in 2016,” he said.
ECB’S SHADOW: The U.S. jobs data helped investors move on from Thursday’s policy moves by the European Central Bank, which were less bold than many in the markets anticipated. The ECB’s decision to cut a key interest rate less than expected and to not raise its monthly bond purchases as expected saw stock markets, particularly in Europe, dive and the euro soar.
DOLLAR RECOVERS: The dollar clawed back some ground against the euro following the jobs data. The euro was trading 0.3 percent lower at $1.09.
ASIA’S DAY: Regional benchmarks ended sharply lower, with Japan’s Nikkei 225 dropping 2.2 percent to close at 19,504.58. South Korea’s Kospi lost 1 percent to 1,974.40. Hong Kong’s Hang Seng shed 0.8 percent to 22,235.89 and the Shanghai Composite Index in mainland China dropped 1.7 percent to 3,524.99. Australia’s S&P/ASX 200 retreated 1.5 percent to 5,151.60.
ENERGY: Expectations that the OPEC oil cartel will keep production levels unchanged later Friday helped shore up prices. Benchmark U.S. crude was up 1.4 percent at $41.67 a barrel in electronic trading on the New York Mercantile Exchange, while Brent, the international standard, rose 1.8 percent to $44.64.
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