By Chibuike Oguh
NEW YORK (Reuters) -Global shares and U.S. Treasury yields rose on Friday following stronger-than-expected job growth data that raised investor expectations that the Federal Reserve could retain its interest rate hikes.
Labor Department data showed on Friday that the U.S. economy added 339,000 jobs last month, significantly higher than most estimates and suggesting tighter labor market conditions which might prompt a Fed rate hike.
The market mood was also supported by the U.S. Senate passing bipartisan legislation on Thursday that lifted the federal government's $31.4 trillion debt ceiling and averted what would have been a first-ever default. The bill, which had been passed by the House of Representatives on Wednesday, heads to President Joe Biden, who is expected to sign it.
"We are of the view that the Fed will keep interest rates steady until sometime next year," said Tom Plumb, portfolio manager at Plumb Balanced Fund, adding that the U.S. economy is much stronger than most people realize.
The MSCI world equity index, which tracks shares in almost 50 countries, was up 1.52%. The pan-European STOXX 600 index (.STOXX) rose 1.21%.
On Wall Street, all three main indexes ended higher, led by gains in financials, industrials, consumer discretionary, technology and healthcare stocks.
U.S. Treasury yields were higher as investors bet on a possible increase in rates although many believe the Fed is likely to stick with a pause in hikes when it meets later this month. Benchmark 10-year notes were up at 3.695%, while yields on the more rate-sensitive 2-year notes rose to 4.509%.
The U.S. dollar edged higher in choppy trading after the strong job growth data. The dollar index rose 0.483%, with the euro dropping 0.5% to $1.0707.
Oil prices gained more than 2% on Friday as attention turned to a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies this weekend.
Brent futures rose 2.5% to settle at $76.13 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 2.3% to $71.74.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.