European stocks, US equity futures and the dollar shot higher, while bond prices fell, sending yields higher, following better-than-expected US employment data.
September non-farm payrolls, the number of US jobs created outside the agricultural sector, rose by 110,000, beating forecasts of 100,000. Futhermore, August’s number, originally registering minus 4,000, was revised to show 89,000 jobs were created in that month.
The suggestion that there is still life in the world’s largest economy helped equity markets. The FTSE Eurofirst 300 index, flat ahead of the data, jumped 0.9 per cent higher to 1,587.07, while S&P 500 futures leapt 11 points.
The dollar, which stood at $1.4125 against the euro before the number, rallied 0.7 per cent to $1.4030, as expectations of further imminent interest rate cuts evaporated.
US Treasuries dragged the government bond market lower, with the 10-year note yield gaining 8 basis points to 4.58 per cent.
”The labour report significantly diminishes the probability of an October policy ease from the Federal Reserve,” said James Knightley at ING Financial Markets.
Alan Ruskin at RBS Greenwich Capital added: ”The data fits with an economy that has decelerated, but by no means precipitously and is more consistent with the soft-landing school of thought.”