Global shares rise, U.S. dollar falls after strong jobs data

[November 05, 2022]  By Chibuike Oguh
 
NEW YORK (Reuters) -Global shares rose on Friday and the U.S. dollar fell, after jobs data came in stronger than expected but also hinted at some slack in the tight American labor market, raising hopes the Federal Reserve might ease up on monetary tightening.  

American flags hang from the facade of the New York Stock Exchange (NYSE) building after the start of Thursday's trading session in Manhattan in New York City, New York, U.S., January 28, 2021. REUTERS/Mike Segar

Data from the U.S. Bureau of Labor Statistics showed the economy generated 261,000 jobs in October. That was higher than an estimate of 200,000, according to a Reuters poll of economists, but it also showed unemployment rising to 3.7% from 3.5% in September while wage inflation dropped to 4.7% from 5% in the prior month.

"We definitely are seeing some early signs of pricing pressure coming down," said Tom Plumb, portfolio manager at Plumb Balanced Fund in Madison, Wisconsin.

The MSCI index of global shares, which tracks equities in 50 countries, broke two straight days of losses and was up 1.72%. European stocks also rallied 1.81%, a day after falling on rate hikes from the Bank of England and the Fed.

Wall Street's three major stock indexes closed higher, driven by technology, financials, consumer discretionary, communication services, and industrials.

The Dow Jones Industrial Average rose 1.26% to 32,403.22, the S&P 500 gained 1.36% to 3,770.55 and the Nasdaq Composite added 1.28% to 10,475.25.

Benchmark U.S. 10-year Treasury yields rose, with the notes at 4.1626%.

"Even though the Fed would not talk about a pivot or anything like that, I think the market is expecting them to remain data dependent and in the next six months you're going to see significant cracks in the pricing pressure," Plumb said.

The U.S. dollar slumped after the employment report. The dollar index fell 1.90%, while the euro was up 2.1% to $0.9956.

Safe-haven gold jumped more than 2% as the dollar fell. Spot gold added 3.1% to $1,680.33 an ounce, while U.S. gold futures gained 2.90% to $1,672.50 an ounce.

Oil prices rose by 5% amid the looming European Union ban on Russian oil and as investors weighed the implications of China's easing of COVID restrictions. Brent crude futures settled up 5% at $98.57 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 4.98% to $92.56 per barrel.

(Reporting by Chibuike Oguh in New York; Editing by Chris Reese and David Gregorio)

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