Bonds Rise, Dollar Falls, Stocks Fluctuate on U.S. Jobs Report

Treasuries rose, the dollar fell and stocks fluctuated after the latest jobs report delivered a mixed picture on the strength of the labor market as investors assess the Federal Reserve’s plans to raise interest rates.

U.S. government bond yields slumped the most in three months, the S&P 500 Index hovered near a two-week low and the greenback dropped against major peers. Brent oil is headed for its biggest weekly gain since 2009 after OPEC approved its first supply cut in eight years, with attention now shifting to compliance with the deal and how other producers will react to a price rally. Gold futures gained for the first time in four sessions amid signs of political uncertainty ahead of an Italian referendum this weekend.

U.S. hiring picked up in November, while the unemployment rate tumbled to a nine-year low on a drop in the number of people in the workforce and wages unexpectedly declined, providing a mixed picture of the labor market. The 178,000 gain followed a 142,000 rise in October that was less than previously estimated, a Labor Department report showed Friday. The median forecast in a Bloomberg survey called for a 180,000 advance. The jobless rate fell 0.3 percentage point to 4.6 percent as labor participation dropped for a second month.

“This is a mixed number, but overall the story for December is unlikely to change,” said Gennadiy Goldberg, an interest-rate strategist at TD Securities LLC. “Given the mixed to weaker print, I think market pricing for 2017 rate hikes could stand to decline somewhat over the near-term.”

Stocks

  • MSCI’s global gauge slipped less than 0.1 percent at 3:06 p.m. in New York.
  • The S&P 500 fell less than 0.1 percent to 2,190.36.
  • Real-estate shares and utilities rose, while financial companies fell.
  • The Stoxx Europe 600 Index retreated for a second day.
  • Emerging-market shares dropped.

Commodities

  • Oil rose in London and New York.
  • Gold pared its weekly loss.
  • Palladium slipped, while platinum rallied on the New York Mercantile Exchange.
  • Silver was little changed on the Comex in New York.

Currencies

  • The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, slipped 0.3 percent.
  • The pound rallied after the anti-Brexit Liberal Democrats gained a U.K. parliamentary seat in a by-election, a result that may complicate Prime Minister Theresa May’s efforts to begin the process of leaving the European Union early next year.
  • The Turkish lira sank to a record low.

Bonds

  • Treasury 10-year yields dropped eight basis points to 2.37 percent after increasing on Thursday to the highest since June 2015.
  • The Bloomberg Barclays Global Aggregate Total Return Index of bonds fell 4 percent in November, its biggest decline since the index was started in 1990.
  • Italy’s 10-year yield was down 14 basis points at 1.91 percent, before the referendum Sunday that has the potential to topple Prime Minister Matteo Renzi’s government.

Bloomberg: December 2, 2016

2016-12-02T14:08:32+00:00