TOKYO (Reuters) – Global stock prices rose to a high of a month and a half on Monday after data showed a surge in U.S. employment, while U.S. bonds came under pressure on concerns that the Federal Reserve could raise interest rates sooner than it indicated.
US S & P500 futures traded 0.5% higher, maintaining gains made during a truncated session on Friday, although tech-heavy Nasdaq futures lagged, trading almost unchanged.
In Asia, Japan’s Nikkei rose 0.8% while MSCI’s broader Asia-Pacific equity index outside of Japan was nearly flat, with China closed for Gravesweep Day and Australia on Monday. Easter.
The MSCI world index for all countries remained nearly flat, but remained close to its highest level since late February and in the face of a record set that month.
The US Department of Labor said on Friday that nonfarm payrolls increased by 916,000 jobs last month, the biggest gain since last August.
That was well above the economists’ median forecast of 647,000 and closer to the markets whispering number of a million. Data for February was also revised up to show 468,000 jobs created instead of the 379,000 previously reported.
“There will be more improvements in April as the restaurants have started to reopen. People expected economic normalization to happen sooner or later, but its pace seems to be accelerating, ”said Koichi Fujishiro, senior economist at Dai-ichi Life Research.
While employment remains 8.4 million jobs below its peak in February 2020, an accelerated recovery raised hopes that all jobs lost during the pandemic could be recovered by the end of next year.
Prospects for a return to full employment, in turn, are raising questions about whether the Fed can deliver on its promise to hold interest rates until 2023.
Markets are in serious doubt, with fully-traded Fed fund futures on a rate hike late next year.
Many market players are also expecting the Fed to consider reducing its bond purchases this year, even though Fed officials have said they have yet to discuss the issue.
“It will be impossible for the Fed to avoid discussing phasing out for the fall,” said Kozo Koide, chief economist at Asset Management One, noting that US President Joe Biden’s infrastructure spending plan is likely to be approved by then.
The yield on two-year US Treasuries rose to 0.186%, close to its eight-month high of 0.194% reached at the end of February.
Longer-term bond yields also rose, with 10-year notes at 1.725% in Asia on Monday, extending their rise that began the Friday after the jobs report.
Strong employment data helped prop up the dollar.
The dollar was trading at 110.57 yen, not far from Wednesday’s one-year high of 110.97. The euro stood at $ 1.1767.
Gold fell 0.4% to $ 1,724.70.
In crypto assets, ether fell 1.7% to $ 2,040.21 from Friday’s record high of $ 2,144.99. Bitcoin was down 0.9% to $ 57,704.
Oil prices fell after OPEC + agreed last week to gradually ease some of its production cuts between May and July.
US crude futures fell 0.6% to $ 61.09 a barrel.
Reporting by Hideyuki Sano, edited by Gerry Doyle