The dollar fell while Wall Street bounced back after two days of losses and tested its record high on Friday following a mixed batch of US economic data this morning showed the labour market remained strong but the vast services sector cooled.
Yields on the US 10-year, which had been up ahead of the jobs report, were down 2.5 basis points to 2.5268 per cent while that on the more policy-sensitive two-year was down 1.2 basis points to 2.3350 per cent.
Treasuries were steady after the jobs data, which some described as a goldilocks report, because the number of jobs created in April significantly beat forecasts but wages stagnated.
However, that was followed by the ISM non-manufacturing index, which showed the vast US services sector fell to its lowest in 20 months. The reports come after Federal Reserve chair Jay Powell on Wednesday indicated no immediate need to move interest rates either higher or lower, coming as markets had begun to see a possibility of a rate cut this year. Other officials, including St Louis Fed president James Bullard, said Friday a rate cut may be warranted if price growth remains soft later this year.
The S&P 500 climbed 1 per cent to 2,945.64, just a fraction below its closing high. The Nasdaq Composite was up 1.6 per cent to 8,164. Both gauges notched weekly gains of roughly 0.2 per cent.
The dollar index retreated further from 98 points, a level it retook for the first time in two years in late April, on upbeat expectations for US growth. Meanwhile, gold prices rose 0.6 per cent to $1,278 per troy ounce.
London’s FTSE 100 gained 0.4 per cent, helped by a weaker pound. However sterling later rallied against the buck, gaining more than 1 per cent to hit a one-month high of $1.3176. Frankfurt’s Xetra Dax 30 rose 0.6 per cent. The Europe-wide Stoxx 600 rose 0.4 per cent.
Hong Kong‘s Hang Seng index added 0.5 per cent, helped by gains of over 2 per cent for HSBC after the bank reported earnings ahead of estimates.
Chinese and Japanese markets remained closed for public holidays.
Brent crude edged up 0.1 per cent to $70.85 a barrel after dropping on Thursday as surging US production offset fears of a global supply crunch. West Texas Intermediate, the US marker, climbed 0.2 per cent.
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