Global stocks turn higher, treasury yields fall after mixed US jobs report

By Naomi Rovnick and Kevin Buckland

LONDON/TOKYO (Reuters) - Global stocks rose and U.S. Treasury yields fell on Friday as markets took a broadly optimistic view of mixed U.S. jobs data and the outlook for inflation and interest rates.

The nonfarm payrolls report showed 223,000 jobs were created in December, more than 200,000 forecast by economists polled by Reuters, while average hourly earnings rose by 4.6% on the same month the year before, undershooting expectations.

The MSCI World equity index rose by 0.3%, putting it on the cusp of its first weekly gain in more than a month.

U.S. E-mini stock futures gained 0.8%, after a 1.16% overnight slide for the S&P 500 that followed private payrolls data, which showed a bigger than expected rise in employment and a drop in jobless claims.

While many investors are cautiously positioned for sky-high U.S. inflation to subside following signs of a slowdown in recent months, they also expect monthly price and wage numbers to drive market volatility.

"Markets are on edge," said Baylee Wakefield, multi-asset portfolio manager at Aviva Investors. "This is an environment where you're going to see a lot of volatility based on small details."

The dollar index, which measures its performance against six currencies, including the yen and euro, was flat at 105.04, but also headed for a weekly gain of around 1.4%.

U.S. two-year Treasury yields, which track interest rate expectations and had spiked to a more than two-month high of 4.497% overnight, eased to 4.3996%. The 10-year yield moderated to 3.6898%. In Europe, the broad Stoxx 600 equity index rose 0.7%, receiving a minor boost from data on Friday showing a sharp drop in eurozone inflation. Germany's Xetra Dax added 0.4%. The euro was broadly steady at $1.05234, remaining about 1.7% down against the dollar since the start of 2023.

 

(Reporting by Naomi Rovnick and Kevin Buckland; Editing by Sam Holmes, Barbara Lewis, Chizu Nomiyama and Tomasz Janowski)