U.S. employment data eases Fed pressure after stock market rises
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European stock markets rose as investors bought into the region’s economic recovery, and weaker-than-expected U.S. employment data eased pressure from the U.S. central bank to reduce monetary stimulus measures that boosted global markets during the pandemic.
The Stoxx 600 index rose 0.6% in early European trading and fell on Friday as traders worked hard to analyze A sharp decline The number of jobs created in the US in August was only 235,000 new employees.
The London FTSE 100 Index also rose 0.5%.
Maarten Geerdink, head of European equity at NN Investment Partners, said, “The weak employment data provides enough room for the Fed to ease how and when to reduce its monthly bond purchases of $120 billion starting in March 2020.”
Before Friday’s non-farm payrolls report, some analysts expected the Fed to announce a reduction in asset purchases as early as this month.
Geerdink added that European stock markets are “in the best position, the Eurozone economy is performing well, while financial conditions remain extremely accommodative”.
Although unofficial data Suggest As tourism and consumer spending promote a rebound in business activity in the euro zone, the European Central Bank has not announced how to end its 185 million euro emergency bond purchase program launched last year to protect the euro area’s financial system from the impact of the coronavirus crisis.
Economists expect the European Central Bank to provide updates on the future of its debt purchases at its meeting on Thursday, and government bond prices signal Some expectations Callback. The benchmark German 10-year bond yield, which is contrary to the price trend, held steady at minus 0.36% on Monday, close to the highest point since the end of July.
Technology stocks tend to perform well when expected long-term bond yields are low Flat valuation Of long-term growth companies performed the best in the Stoxx index on Monday, rising 1.2%.
The US stock market was closed for Labor Day. The U.S. dollar index, which measures the U.S. dollar against six other currencies, rose 0.3%, reversing Friday’s decline in the non-farm payrolls report. The euro fell 0.2% against the dollar, buying 1.1861 US dollars.
The international oil benchmark Brent crude oil fell 0.6% to US$72.15 per barrel after the news line reported that Saudi Arabia was lowering prices for Asian buyers.
On the Asian stock market on Monday, China’s Vice Premier Liu He said that despite the crackdown on the regulation of technology and education, the government will continue to support private companies and China’s stock market will rise.
“The policy to support the private economy has not changed… and it will not change in the future,” Liu said in a comment reported by the state news agency Xinhua. The Shanghai and Shenzhen 300 Index rose 1.9%.
Japan’s Nikkei 225 index also rose 1.8%, as investors bet that the unpopular Prime Minister Yoshihide Suga’s sudden resignation will usher in his successor, focusing more on protecting the country’s economy from the rise in Covid-19 cases.