(Include the conclusion of the US markets)
* US job data beats expectations with a profit of 916,000
* Dollars, bond yields rise in light Good Friday trading
* Asian equity markets are benefiting from recovery optimism
By Herbert Lash
NEW YORK, Feb. 6 / PRNewswire / – The dollar and benchmark Treasury note yield rose in light trading Friday after data showing an increase in American attitudes in March suggested a rebound in the US economy, which is likely next is going to be the strongest in decades.
Stock markets were closed for Good Friday in America, Europe and elsewhere, but it is not a US government holiday, and the Department of Labor released the closely watched report on non-farm payroll.
The US economy created 916,000 jobs in March, more than economists forecasted 647,000, and the unemployment rate fell to 6.0% from 6.2% in the previous month. The employment figures for February have been revised upwards according to the job report.
The futures for the S&P 500 stock index increased gains to 0.43% according to the report.
Despite the strong numbers, the data won’t change the Federal Reserve’s stance on monetary policy, said Steven Ricchiuto, US chief economist at Mizuho Securities USA in New York.
“The economy is recovering, but it is not producing the things that will change the direction of monetary policy,” said Ricchiuto. “We’re going to test the 1.77% level (in the 10 year Treasury bill), but I’m not sure it will break that number.”
The 10-year US Treasury bill was up 3.5 basis points and returned 1.7143%. However, the spike was still below a 14-month high of 1.776 on Tuesday.
Treasury bond yields have boosted the economic outlook, driven by US President Joe Biden’s plans for $ 2.3 trillion in infrastructure spending and accelerated adoption of COVID-19 vaccines.
The March employment report is the first of several very strong job reports for the next several months, said Russell Price, chief economist at Ameriprise Financial Services Inc. in Troy, Michigan.
“The outlook looks very good,” said Price. “In my opinion, the biggest constraint could be the ability of the supply side of the economy to meet consumer demands.”
Asian markets rose overnight as optimism about a global economic recovery fueled equity markets in Japan, China and South Korea.
The Nikkei in Tokyo hit a two-week high. Semiconductor stocks have led the market as the industry seeks to boost manufacturing in the face of a global chip shortage.
Biden’s spending plan includes $ 50 billion in chip manufacturing and other technology research, said Fumio Matsumoto, chief strategist at Okasan Securities.
China’s stocks posted a second weekly gain as recent data pointed to a solid rebound in the world’s second largest economy. Both the CSI300 Index and the Shanghai Composite Index closed at nearly four-week highs.
Chinese steel rebar and hot-rolled coil prices closed at record highs after China on Thursday announced a nationwide investigation into steel capacity cuts launched in 2016 to ensure production plummets that year.
South Korean stocks closed higher to post their biggest weekly gain in nearly two months as optimism about a stimulus-triggered economic recovery lifted stocks.
Stocks rose on Wall Street Thursday, with the S&P 500 index hitting a new high when it hit the 4,000 mark and the Deutsche Börse DAX benchmark index hit a new high in Germany. Stocks rose across the world on reports of the strongest manufacturing data in decades.
The dollar gained for the third straight week. Labor strength should prove positive for the dollar, said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
The dollar’s rise to multi-month highs is likely to continue as more investors look to the economy to recover.
The dollar index rose 0.122% and the euro 0.13% to USD 1.176. The Japanese yen was down 0.09% against the greenback to 110.68 per dollar.
The spot gold price fell 0.08% to $ 1,728.84 an ounce.
(Reporting by Herbert Lash, additional reporting by Gertrude Chavez-Dreyfuss in New York; editing by Chizu Nomiyama)