© Reuters. FILE PHOTO: A pedestrian examines various stock prices outside a brokerage house in Tokyo, Japan, February 26, 2016. Asian stocks made cautious gains on Friday as a rally of global financial leaders provided a multitude of reassuring comments, but few in the wa
By Katanga Johnson and Lawrence White
WASHINGTON / LONDON (Reuters) – US and European stocks resumed their rally and hit a one-year high on Friday as US jobs data surprised on the upside.
Non-farm payrolls increased by 531,000 jobs last month as the surge in COVID-19 infections over the summer eased, offering more evidence that U.S. economic activity is picking up momentum at the start of the fourth trimester.
The dollar index, which measures the greenback against a basket of six rivals, hit 94.634 after the jobs report, its highest level since September 25, 2020.
The greenback, which has strengthened by around 1% in the last fortnight, climbed 0.22% for the last time to 94.534.
“If these numbers continue at this rate, we could probably see full employment by the end of the first quarter,” said Peter Cardillo, chief markets economist at Spartan Securities.
The index rose 0.75 while the gain 0.71%. The 0.58% added. The pan-European index rose 0.33%.
MSCI’s global stock gauge gained 0.43%, keeping pace to continue a four-day record-breaking streak in a week in which central banks around the world refrained from hawkish surprises .
Friday’s advances came even after the US Federal Reserve finally announced on Wednesday that it would start scaling back its massive asset purchase program, although Fed Chairman Jerome Powell said he did not was in no rush to increase borrowing costs.
“Even if it went as planned, this is an important step. The direction of travel is now clearly towards policy normalization, although the Fed has stressed that the reduction will not tighten,” said Stefan Hofer, chief investment strategist for LGT in Asia-Pacific.
“It was really expert communication and very well managed.”
In Asia, the largest MSCI index of Asia-Pacific equities excluding Japan closed 0.24%, while losing 0.61%.
Hong Kong had weighed on the regional index, falling 1.25% as the index heavyweight and rate-sensitive HSBC fell 3.6% on an accommodating call from the Bank of England (BoE ) and anxiety over real estate actions.
Trading in shares of Chinese developer Kaisa Group Holdings Ltd was suspended a day after the company said a subsidiary missed a payment on a wealth management product, the latest sign of a worsening liquidity crisis in the Chinese real estate sector.
An index listing mainland Chinese developers listed in Hong Kong slipped 2.8% and an onshore Chinese real estate index fell 2%.
More broadly, Shanghai stocks lost 1% and Chinese blue chips slipped 0.5%.
While investors were happy with the Fed’s communications, several felt they had been misguided by BoE policymakers.
The Bank of England kept interest rates on Thursday, upset investors who were convinced it would be the first of the world’s major central banks to raise borrowing costs after the pandemic.
The pound was close to a month’s low on Friday after falling 1.36% the day before following the central bank move, which also disrupted bonds in Britain and more broadly in Europe.
The German 10-year bond yield looked set to see its biggest weekly decline since June last year, down 15 basis points as central banks left their key rates unchanged.
Oil prices rose, marking a partial recovery after OPEC + producers rejected a US call to increase supply and instead maintained their plans for a gradual return to production interrupted by the coronavirus pandemic.
recently rose 1% to $ 79.60 a barrel and was at $ 81.13, up 0.73% on the day, above the month’s lows reached a day earlier following a report that Saudi Arabia’s production will soon exceed 10 million barrels per day for the first time during the COVID-19 pandemic.[O/R]
added 0.4% to $ 1,797.90 an ounce.