The Associated Press
LONDON (AP) — Softer than anticipated U.S. jobs data helped rein in market expectations of an interest rate increase from the Federal Reserve in the next few months, helping to shore up stock markets on Friday. Following the data, European stocks advanced while Wall Street futures clambered off lows.
KEEPING SCORE: In Europe, most stock markets had been trading deep in the red up until the monthly nonfarm payrolls report, but soon recouped most of their losses after the release. Britain’s FTSE 100 index was down 0.4 percent at 6,850 while France’s CAC 40 fell 0.1 percent to 4,491. Germany’s DAX was actually 0.3 percent higher at 9,751. Dow futures and the broader S&P 500 futures were only down 0.1 percent. Both had been sharply lower earlier in the European session.
SOFT PAYROLLS: As is often the case, the monthly nonfarm payrolls data can change the mood in markets. And it was no different on this occasion after the Labor Department reported that U.S. employers added just 142,000 jobs in August, snapping a six-month streak of hiring above 200,000. Though the unemployment rate fell to 6.1 percent from 6.2 percent, investors responded positively to the overall weakness in the headline payrolls number because it may delay the day when the Fed starts raising interest rates. The Fed will soon be finished with its monetary stimulus, stoking talk of a rate increase.
ANALYST TAKE: “A very disappointing employment report is going to make life a lot easier for Janet Yellen and the more dovish wing at the Fed,” said Alan Ruskin, an analyst at Deutsche Bank.
UKRAINE CEASE-FIRE: Traders are also keeping a close watch on developments in the Belarus capital of Minsk as talks are expected to bring a much-anticipated cease-fire to the fighting in eastern Ukraine. The crisis in Ukraine has been a key geopolitical worry in markets over the past few months. Ukrainian President Petro Poroshenko has said he would sign a cease-fire if negotiators reached an agreement. The rebels also promised to declare a truce if a political settlement for the mostly Russian-speaking region is signed.
CURRENCIES: A day after the euro tanked after the European Central Bank surprised markets by cutting interest rates and enacting a new stimulus program, Europe’s single currency settled somewhat, trading up 0.1 percent on the day at $1.2973. On Thursday, the euro fell to a 14-month low of $1.2920. The dollar was at 105.22 yen after rising as high as 105.71 yen, the highest level since October 2008, from 105.38 in late trading Thursday. The euro was near a 14-month low of $1.2946 from $1.2937.
ASIA’S DAY: Regional benchmarks were mixed, with Japan’s Nikkei 225 index ending less than 0.1 percent lower at 15,668.68. South Korea’s Kospi dipped 0.3 percent to 2,049.41 and Hong Kong’s Hang Seng shed 0.2 percent to 25,240.15. In mainland China, the Shanghai Composite Index rose 0.9 percent to 2,326.43. Australia’s S&P/ASX 200 lost 0.6 percent to 5,598.70.
ENERGY: The price of oil stabilized after slumping on a report that U.S. supplies fell less than expected last week. Benchmark crude oil was down 29 cents to $94.28 a barrel in electronic trading on the New York Stock Exchange after falling $1.09 on Thursday.