Article Highlights

  • Stocks, dollar, bond yields lifted by U.S. jobs data
  • Dollar still down for the week after White House woes
  • Sterling near nine-month low vs euro
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The dollar, bond yields and U.S. stock futures all rose on Friday, following stronger-than-expected U.S. jobs data which also pointed to wage growth picking up in the world’s biggest economy.

It bolstered what was set to be a fourth straight week of gains for world stocks and metals, and helped lift some of the weight that has been on the dollar as a saga over Russian interference in last year’s U.S. election has deepened.

The U.S. Labor Department said non-farm payrolls increased by 209,000 jobs last month amid broad gains across industries.

June’s employment gain was also revised up to 231,000 from an already strong 222,000, while hourly earnings rose 0.3 percent in July after rising 0.2 percent in June. That was the biggest increase in five months.

It sent the dollar index – the dollar measured vs 6 other top world currencies – to a four-day high, pushing the euro back to $1.1829 and the Japanese yen to 110.59 per dollar.

“At first blush it is pretty strong,” said David Joy, Chief Market Strategist at Ameriprise Financial in Boston.

“The number of jobs created easily exceeded the expectation. Good strength in manufacturing jobs, average hourly earnings met expectations, an uptick from last month, participation rate up a tick.”

Wall Street stock futures climbed to point to a slightly higher start for Wall Street’s main markets than they had been before the data.

The highlight so far this week has been the Dow Jones Industrial breaking through the 22,000 barrier which has also helped MSCI’s ‘All World’ index rise for a fourth week in a row.

In bond markets, traders were betting that the upbeat payrolls figures would help cement a scaling back of the Federal Reserve’s $4.5 trillion balance sheet next month, and could raise U.S. interest rates again later in the year.

The U.S. 10-year Treasury yield was up 3 basis points at 2.26 percent, dragging bond yields in Europe higher . The U.S. five-year, 30-year treasury yield curve also flattened to below 100 bps, the lowest since July 11.

In commodities, oil prices continued to be weighed down by persistent concerns about high crude supplies from both OPEC and the United States.

U.S. crude slipped 0.2 percent to $48.93 a barrel, after sliding 1.1 percent overnight, putting it on track for a weekly loss of 1.5 percent. Global benchmark Brent steadied at $51.97, after a 0.7 percent loss the previous day.

Gold was nudged lower to $1,262 an ounce after the payrolls figures and now looks set to score a modest weekly fall for the first time in four weeks.