TOKYO (Reuters) – Global stock prices rose to a high of 1 1/2 months on Monday after data showed a rise in U.S. employment, while U.S. bonds came under pressure over concerns that the Federal Reserve would drop interest rates earlier. could drive up than indicated.
US S & P500 futures were up 0.5% and held their gains from Friday in a truncated session, although the tech-heavy Nasdaq futures lagged and traded almost flat.
In Asia, Japan’s Nikkei rose 0.8%, while MSCI’s widest index of Asia-Pacific stocks outside Japan was nearly flat, with China closed for Tomb Day and Australia on Easter Monday.
MSCI’s global index for all countries was almost flat, but was close to its highest level since late February and on the verge of a record high that month.
The US Labor Department said on Friday that nonfarm payrolls rose by 916,000 jobs last month, the largest increase since August last year.
That was well above economists’ median prediction of 647,000 and closer to the whisper of a million in the markets. The data for February was also revised higher to show 468,000 jobs instead of the previously reported 379,000.
“There will be further improvements in April as restaurants reopen. People expected economic normalization to happen sooner or later, but the pace seems to be accelerating, ”said Koichi Fujishiro, senior economist at Dai-ichi Life Research.
While employment remains 8.4 million jobs below its February 2020 high, an accelerated recovery sparks hope that any jobs lost during the pandemic could be recouped by the end of next year.
The prospects for a return to full employment, in turn, raise questions about whether the Fed can keep its promise to maintain interest rates through 2023.
Markets have strong doubts, with Fed Fund futures fully priced into one rate hike by the end of next year.
Many market players also expect the Fed to consider phasing out its bond purchases this year, even though Fed officials have said they have not yet discussed the issue.
“It will become impossible for the Fed to avoid a discussion of tapering in the fall,” said Kozo Koide, chief economist at Asset Management One, noting that US President Joe Biden’s infrastructure spending plan is likely to be completed by then. adopted.
Two-year yields on US Treasuries rose to 0.186%, near the eight-month peak of 0.194% reached in late February.
Longer-dated bond yields also rose, with 10-year bonds at 1.725% in Asia on Monday, extending the rise that began Friday after the jobs report.
Strong job data helped support the dollar.
The dollar was trading at 110.57 yen, not far from Wednesday’s one-year high of 110.97. The euro stood at $ 1.1767.
Gold fell 0.4% to $ 1,724.70.
In crypto assets, ether fell 1.7% to $ 2,040.21 from Friday’s all-time high of $ 2,144.99. Bitcoin fell 0.9% to $ 57,704.
Oil prices fell after OPEC + agreed last week to gradually cut some of its production cuts between May and July.
US crude oil futures fell 0.6% to $ 61.09 a barrel.
Reporting by Hideyuki Sano, edited by Gerry Doyle