The US jobs report raised hopes that the Fed will cut interest rates this year
US stocks closed higher Thursday as markets got a boost after weekly jobless claims came in higher than expected. the number of U.S. workers applying for unemployment benefits came in at 231,000 last week, up 22,000 from the week before. The report raised hopes that the Federal Reserve will cut interest rates this year, thus boosting risk appetite. As such, the Dow Jones Industrial Average added 0.8% to hit its seventh day of gains. The S&P 500 index climbed 0.5% to trade less than 1% away from its all-time high, while the Nasdaq Composite gained 0.3%.
Following an upbeat session on Wall Street, shares in Asia rose ahead of the weekend after US jobs data supported the case for US rate cuts. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.66% and was on course for a nearly 1% gain for the week. Japan’s Nikkei 225 was 0.49% higher, Australia’s S&P/ASX 200 added 0.35%, and South Korea’s Kospi gained 0.57%. Hong Kong’s Hang Seng jumped 2.3%, while the Shanghai Composite surged 0.1%.
In Europe, equities rose on Friday, with strong economic data out of the UK adding to positive sentiment in the region fueled by renewed hopes for rate cuts by the Fed. Fresh data released earlier today showed that Britain’s economy grew by a relatively healthy 0.6% in the first quarter, above the expected 0.4%. On a monthly basis, the economy grew by 0.4%, faster than the expected 0.1% growth. London’s FTSE 100 gained 0.75% so far in early deals.
Meanwhile, the US dollar came under pressure on Thursday as risk sentiment improved further following US jobs report. The USD index slipped from a local high of 105.75 to fins support around 105.50. On Friday, the greenback refrains from a deeper retreat so far, deciding on further direction. Should the mentioned support withstand the pressure, a local bounce could be expected. However, as risk demand persists for the time being, the safe-haven dollar may struggle to attract sustained demand at this stage.
