People are reflected on the electronic board of a securities firm in Tokyo
Strong U.S. jobs data continued to shore up stock markets yesterday as investors welcomed the growing certainty of an interest rate increase from the U.S. Federal Reserve next week. Meanwhile, oil prices slid again after the OPEC oil cartel’s decision to not cut production.
KEEPING SCORE
In Europe, the CAC-40 in France was 1.6 percent higher at 4,789 while Germany’s DAX rose 2 percent to 10,964. The FTSE 100 index of leading British shares was 0.4 percent higher at 6,265. U.S. stocks were poised for a steadier opening, with Dow futures and the broader S&P 500 futures up 0.1 percent. Last Friday’s strong U.S. jobs figures helped the S&P post its biggest gain since early-September.
U.S. JOBS
Those figures showed that the U.S. economy added 211,000 jobs in November. That was more than investors expected, and a sign that consumers are spending and keeping the American economy afloat, even as manufacturing and energy companies struggle.
FED IMPACT
The data cemented expectations that the Fed will raise interest rates from a record low at its policy meeting on Dec. 16. That’s potentially good for the dollar as it raises returns for holders of the U.S. currency. The euro was down 0.6 percent at USD1.0821 while the dollar rose 0.3 percent to 123.42 yen. And though at face value it would be negative for stocks as it raises costs for business, investors have welcomed the increased certainty about the Fed’s likely actions after months of guesswork and anxiety.
THE QUOTE
“We look set for an environment that will see the dollar and global stock markets rise, so long as the Federal Reserve delivers on expectations to increase interest rates this month,” said Chris Beauchamp, senior market analyst at IG.
CHINA DATA
Much focus this week will also center on China, the world’s number 2 economy. Concerns over China’s slowing growth have weighed on market sentiment over the past few months. Trade data are due today, inflation tomorrow and retail sales, industrial production and fixed asset investment on Saturday.
ASIA’S DAY
Japan’s Nikkei 225 jumped 1.0 percent to 19,698.15 and Australia’s S&P/ASX 200 rose 0.1 percent to 5,155.70. But South Korea’s Kospi fell 0.5 percent to 1,963.67, while Hong Kong’s Hang Seng inched down 0.04 percent at 22,226.85. China’s Shanghai Composite gained 0.3 percent to 3,536.93. Stock benchmarks also rose in Taiwan, Singapore and Indonesia.
ENERGY
Oil markets, meanwhile, were being driven by OPEC’s decision last Friday to keep production unchanged. Benchmark U.S. crude was down 95 cents to $39.02 a barrel in electronic trading on the New York Mercantile Exchange, following an equivalent slide on Friday. Brent crude, a benchmark for international oils, dropped 84 cents to $42.18 in London. AP
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