US dollar, stocks rally on strong US jobs data

NEW YORK, May 3 — The US dollar rose over 1.0 per cent against the yen and global equity markets rallied today, pushed higher by an American labour report showing stronger jobs growth in April than expected, data that lifted US stocks to a new record high.

US nonfarm payrolls rose 165,000 last month and the jobless rate fell to a four-year low of 7.5 per cent, the Labor Department said. Economists expected payrolls to rise 145,000 and the unemployment rate to hold steady at 7.6 per cent.

Wall Street stocks surged at the open and European shares rallied more than 1.0 per cent on news of the resilient US labour market. The drop in the US jobless rate reflected a gain in employment, rather than people leaving the workforce.

The benchmark S&P 500 stock index broke through the 1,600 mark for the first time, and the Dow was less than 50 points from surpassing the 15,000 mark as both indices set record highs.

Crude oil, copper and other commodities’ prices also rallied, while government debt slumped on the data.

“The employment number was definitely the trigger for today’s rally,” said Michael Korn, president at Skokie Energy in Princeton, New Jersey.

The Dow Jones industrial average was up 134.81 points, or 0.91 per cent, at 14,966.39. The Standard & Poor’s 500 Index was up 16.01 points, or 1.00 per cent, at 1,613.60. The Nasdaq Composite Index was up 34.74 points, or 1.04 per cent, at 3,375.37.

In Europe, the FTSEurofirst 300 of leading shares rose 1.13 per cent to 1,220.16, while MSCI’s all-country world equity index rose 0.83 per cent to 371.0.

The dollar rose 1.2 per cent to ¥99.15, on pace for its biggest one-day rise in two weeks, while the euro rebounded a day after President Mario Draghi of the European Central Bank said it was technically ready for negative deposit rates.

The euro was up 0.44 per cent to US$1.3121.

German Bund futures fell to a session low of 146.20, down 96 ticks on the day.

The benchmark 10-year US Treasury note was down 25/32 in price to yield 1.709 per cent.

Brent crude was up US$1.02 at US$103.87 a barrel, while US crude gained 93 cents to US$94.92 a barrel.

“The idea that the employment is holding as well as it is in the face of the fiscal headwinds the economy is currently enduring is a very positive sign of the economy’s underlying fundamental improvements,” said Russell Price, a senior economist at Ameriprise Financial Services.

The better jobs data comes just a month after the Bank of Japan promised to inject about US$1.4 trillion (RM4.3 trillion) into its economy to spur growth and end decades of deflation. — Reuters


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