By Rodrigo Campos
NEW YORK (Reuters) – World stock markets advanced on Friday after U.S. job growth posted its biggest increase in more than 1-1/2 years, but the U.S. dollar slipped against most peers except the yen as slowing wage gains indicated only a gradual increase in inflation this year.
A planned meeting between North Korean leader Kim Jong Un and U.S. President Donald Trump, and Kim’s pledge to refrain from further nuclear or missile tests during the proposed talks, buoyed investor sentiment, boosting stocks in Asia and giving support to crude futures after two negative sessions for oil.
Wall Street led global equity gains as the U.S. labor data landed in a sweet spot for stock investors.
“The great news is the labor participation rate went up, the headline numbers are great, and the average hourly earnings has settled back down into consensus,” said Art Hogan, chief market strategist at B. Riley FBR in New York.
“It’s a great report across the board.”
The Dow Jones Industrial Average rose 288.05 points, or 1.16 percent, to 25,183.26, the S&P 500 gained 30.28 points, or 1.11 percent, to 2,769.25 and the Nasdaq Composite added 90.43 points, or 1.22 percent, to 7,518.37.
The pan-European FTSEurofirst 300 index rose 0.32 percent and MSCI’s gauge of stocks across the globe gained 0.80 percent.
Emerging market stocks rose 1.06 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.91 percent higher, while Japan’s Nikkei rose 0.47 percent.
The yen fell sharply versus the U.S. dollar after the Bank of Japan stuck to its dovish policy stance and as Kim’s denuclearization pledge boosted risk assets. Still, the greenback slipped against a basket of currencies as the slow U.S. wage gains supported a view that the Federal Reserve would not quicken its pace of raising interest rates.
The Japanese yen weakened 0.66 percent versus the greenback at 106.93 per dollar. The dollar index fell 0.14 percent.
The euro up 0.09 percent to $1.2321 while sterling was last trading at $1.3866, up 0.41 percent on the day.
The Mexican peso gained 0.44 percent versus the U.S. dollar at 18.57. The Canadian dollar rose 0.54 percent versus the greenback at 1.28 per dollar.
U.S. Treasury yields advanced across the board after the strong jobs data.
Benchmark 10-year notes last fell 11/32 in price to yield 2.9048 percent, from 2.866 percent late on Thursday.
The 30-year bond last fell 20/32 in price to yield 3.1655 percent, from 3.132 percent late on Thursday.
“The headline (payrolls) print is sort of a shockingly strong number, the guts of the report are as good,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York.
U.S. crude rose 2.86 percent to $61.84 per barrel and Brent was last at $65.36, up 2.75 percent on the day.
Spot gold added 0.1 percent to $1,322.72 an ounce. U.S. gold futures gained 0.12 percent to $1,323.30 an ounce.
Copper rose 1.86 percent to $6,960.00 a ton.
(GRAPHIC: Global assets in 2018 – http://tmsnrt.rs/2jvdmXl)
(GRAPHIC: Global currencies vs. dollar – http://tmsnrt.rs/2egbfVh)
(GRAPHIC: Emerging markets in 2018 – http://tmsnrt.rs/2ihRugV)
(GRAPHIC: MSCI All Country Wolrd Index Market Cap – http://tmsnrt.rs/2EmTD6j)
(Additional reporting by Gertrude Chavez-Dreyfuss and Richard Leong in New York and Ankur Banerjee in Bangalore; Editing by Bernadette Baum)
