By Nigel Stephenson
LONDON (Reuters) – Shares rose in Europe and Asia on Monday, helped by commodity stocks as the dollar remained near its lowest in more than three weeks, after surprisingly weak jobs data led investors to push back expectations for an increase in U.S. interest rates.
Wall Street looked set to follow suit and rebound from the declines triggered by Friday’s non-farm payrolls data, according to index futures
Yields on low-risk U.S. Treasuries fell as expectations faded that rates would rise soon, remaining near almost two-month lows touched after Friday’s data. Their German equivalents held close to record-low levels.
The focus for traders and investors shifted to a speech on the economy and monetary policy later on Monday by Federal Reserve Chair Janet Yellen, who will appear at the World Affairs Council of Philadelphia at 1630 GMT (12.30 p.m. ET).
Elsewhere, sterling fell more than 1 percent on the day at one point. Opinion polls published over the weekend showed growing support for Britain’s voting to leave the European Union in a June 23 referendum.
The pan-European FTSEurofirst 300 stocks index <.FTEU3> gained 0.2 percent, having fallen around 1 percent on Friday. Britain’s FTSE 100 <.FTSE>, which includes several major mining and oil and gas companies, rose 1 percent.
The STOXX 600 basic resources index <.SXPP> was up 3.5 percent. Anglo American
“The mining sector is bouncing up on the back of the weaker dollar,” Hantec Markets’ analyst Richard Perry said.
The price of copper
MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> rose nearly 1 percent. Australia’s mining-heavy S&P/ASX 200 index <.AXJO> closed up 0.8 percent.
However, a stronger yen against the dollar helped push Japan’s Nikkei stock index <.N225> down 0.4 percent.
The dollar, which suffered its biggest one-day drop against a basket of major currencies <.DXY> in four months on Friday, recovered some of the lost ground on Monday, rising 0.1 percent.
After dropping to a one-month low of 106.35 yen
“Rate hike expectations for June have disappeared. And while the focus has shifted to July, we expect the dollar to be rather subdued this week, with not much of economic data out of the U.S.,” said Yujiro Goto, a currency strategist at Nomura.
U.S. 10-year yields
BUND YIELDS DIP
German 10-year Bunds
The British opinion polls and gains by the anti-establishment 5-Star Movement in weekend Italian municipal elections also supported Bunds.
“We have a poll showing the leave camp in the lead in the UK and in Italy we see the 5-Star Movement gaining ground, so political risk is a key issue,” said KBC strategist Piet Lammens.
Italian 10-year yields
(Additional reporting by Lisa Twaronite in Tokyo, Anirban Nag, Dhara Ranasinghe, Alistair Smout and Sudip Kar-Gupta in London; Editing by Larry King)