By Lawrence Delevingne and Iain Withers
BOSTON/LONDON (Reuters) -Global stock prices rose as investors increased their bets on the prospect of a U.S. interest rate cut this month after payroll data showed strong job growth in November, while the euro fell against the dollar as the political unrest gripped France.
Futures markets gave an 85% chance that the U.S. Federal Reserve would cut rates by 25 basis points at the Dec. 17-18 meeting after the data, compared to 68% earlier in the session.
Nonfarm payrolls rose by 227,000 jobs last month, after an upwardly revised increase of 36,000 in October, in a month hit by hurricanes and strikes. Economists polled by Reuters had predicted payrolls would rise by 200,000 jobs.
“The data this morning was a Thanksgiving buffet with payrolls in order, revisions positive, but unemployment ticking higher despite declining employment rates,” said Lindsay (NYSE:) Rosner, head of multisector investing at Goldman Sachs Asset Management.
“This print does not destroy the holiday spirit and the Fed remains on track to deliver a rate cut in December,” Rosner added in an email.
The Nasdaq and Nasdaq rose 0.25% and 0.8% respectively on Friday, further supported by optimistic forecasts from Lululemon Athletica (O:), Ulta Beauty (O:) and other companies. The Dow Jones fell slightly, with a 5% decline in shares of UnitedHealth Group (N:) weighing on the index.
The MSCI index for shares around the world added about 0.2%.
Treasury yields fell to their lowest level in six weeks following the payroll data release, with US 10-year benchmark bond yields falling 2.9 basis points to 4.153%, while yields, which typically move in line with interest rate expectations for US government bonds fell by 2.9 basis points to 4.153%. The Federal Reserve fell 4.8 basis points to 4.098%.
It rose 0.3% to $106.05 after the jobs report.
Strategists at TD Securities said there was a “high hurdle” for the dollar to continue its recent gains. “We think the path of least resistance remains for some USD weakness, providing a great opportunity to buy the dip in early 2025,” they wrote in a client note on Friday.
European shares posted gains on Friday, with French shares posting their biggest daily gain in three weeks, as investors factored in a potential budget despite ongoing political uncertainty, while also analyzing an upbeat US jobs report.
The pan-European STOXX 600 () rose 0.2%, advancing for a seventh consecutive day and posting its strongest weekly performance in ten.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan pared earlier losses to rise 0.2% as a rally in Chinese shares lifted investor caution over political unrest in South Korea compensated.
Chinese shares rose to their highest level in three weeks as investors snapped up technology stocks ahead of a high-level policy meeting next week that will set the agenda and targets for China’s economy next year.
Risk premium investors’ demands to hold French government bonds instead of German Bunds fell to their lowest level in two weeks on Friday, after President Emmanuel Macron said he would soon appoint a new prime minister to pass a 2025 budget. parliament to approve.
The euro was up on Thursday, thanks to market relief that France had avoided a more volatile political outcome for the time being. The euro last fell about 0.23% to $1.056.
BITCOIN REVERSAL
which touched the $100,000 mark for the first time on Thursday as investors bet on a friendly shift in US regulations, was initially met with profit-taking and fell to $92,092. Prices then recovered, rising 2.3% on the day around $101,300.
US President-elect Donald Trump said on Thursday he is appointing former PayPal (O:) Chief Operating Officer David Sacks as his ‘White House AI & Crypto Czar’, a further step towards an overhaul of US blockchain related policies.
“This spike in volatility over the past 24 hours has the hallmarks of a classic blow-off top,” said Tony Sycamore, an analyst at IG.
Oil prices fell about 1.5% and are heading for weekly losses as analysts forecast a supply glut next year due to floundering demand, despite an OPEC+ decision to postpone production increases and deep output cuts until the end 2026.
The gold price rose to $2,632 per ounce on Friday.
