Global shares rise as US jobs report stokes low rate hopes

Similarly, monetary policy also has been sensitive towards the jobs report as in all the FOMC meetings this year, chairperson Janet Yellen’s decision on a rate hike has primarily been driven by the labor market conditions. According to IHS Markit and the Chartered Institute of Purchasing and Supply, the purchasing managers’ index for Britain – a broad gauge of economic activity – jumped to 53.2 points, reversing a record fall to 47.4 in July experienced after the June 23 referendum.

Federal Reserve Bank of San Francisco President John Williams said that the central bank might raise rates at any of its meetings.

The greenback was down 1.4 percent against the won, while Australia’s dollar added 0.5 percent and Indonesia’s rupiah also climbed 0.5 percent.

Add these to the gauge of United States inflation reported earlier and we have a case for a United States economy that is not in any way at risk of overheating.

US stocks rallied Friday as a weaker-than-expected August jobs report eased fears that the Fed would begin its next rate hike soon, since the Federal Open Market Committee is set to meet on September 20-21.

Asian traders took a breather Wednesday after a recent rally, with Tokyo hit by a strong yen following a shock slump in the U.S. service sector that wiped out the chances of an interest rate hike this month.

Given that strength in the service sector has been making up for softness in manufacturing in the past year or so, the data was a blow to the case for the Fed to raise interest rates as soon as this month.

US stocks have been trading in a tight range in the past few months, with the S&P 500 not moving more than 1 percent in either direction on a daily basis since July 8.

The dollar bought 101.30 yen in Tokyo, down from 101.99 yen in NY and well off the 103.61yen in Asia earlier Tuesday.

“The dollar was apparently hit by massive selling by a USA investment trust fund manager”, an official at a currency brokerage house said. The long streak of job growth has been inconsistent over the last few months. But most investors didn’t expect rates to rise this month, and the jobs report appeared to confirm that.

Declining US yields undermined the dollar against other currencies and precious metals.The dollar slumped 1.38 per cent on the yen yesterday and fell another 0.4 per cent to 101.58 yen in early Wednesday trade.

Gold rallied to US$1,352.4 per ounce to near three-week highs on Tuesday, and last stood at US$1,350.0.

ENERGY: Oil prices pushed ahead amid speculation of a production freeze after the world’s two largest oil producers, Russian Federation and Saudi Arabia, agreed to act together to stabilize global oil output.

Despite higher crude prices, oil-related stocks in Asia were mostly lower.

Brent crude, the global benchmark, gained 35 cents to $47.61 a barrel.

The yellow metal had hit $1,352.50 on Tuesday, the highest since 19 August.