(Updates to NEW YORK trading, recasts throughout, changes
quote, updates byline, dateline, previous LONDON)
* Dollar, U.S. yields lifted by rate-hike expectations after
jobs
* Investors seen more comfortable with Fed rate increase
* Dollar strength hits oil
By David Gaffen
NEW YORK, Nov 6 (Reuters) - The dollar jumped more than 1
percent to a 7-month high and short-term benchmark U.S. bond
yields rose to their highest in five years on Friday, after
stronger-than-expected jobs data left investors expecting the
first rise in U.S. interest rates in almost a decade next month.
Wall Street dipped modestly, rebounding from earlier losses,
a sign that investors have grown comfortable with the idea that
the Fed will raise rates before the end of the year.
The health of the U.S. labor market is a key factor in the
Federal Reserve's thinking. A total of 271,000 non-farm jobs
were added in the U.S. economy last month, easily topping
expectations of 180,000. That was the largest rise since
December 2014, with wages also increasing at a robust clip.
The unemployment rate fell to 5 percent while payrolls data
for August and September were revised to show 12,000 more jobs
created than previously reported. urn:newsml:reuters.com:*:nLNN6MEBHQ USNFAR=ECI
USUNR=ECI ECONG7
That boosted federal-funds futures contracts that bet on the
Fed's next moves. Expectations for a December increase were up
to about 73 percent in the wake of the report, from 58 percent
one day ago.
The two-year Treasury yield US2YT=RR rose to its highest
in five years, boosting the gap between U.S. and German yields
to its widest since late 2006. The two-year yield rose to 91
basis points, while the 10-year sold off, boosting its yield to
2.34 percent.
The Dow Jones industrial average .DJI fell 38.38 points,
or 0.21 percent, to 17,825.05, the S&P 500 .SPX lost 8.95
points, or 0.43 percent, to 2,090.98 and the Nasdaq Composite
.IXIC added 2.82 points, or 0.06 percent, to 5,130.56.
"We've seen in the past seven to ten trading days the
likelihood of a Fed increase has been rising and yet we've seen
the equity markets handle that pretty well," said Sean Lynch,
co-head of global equity strategy at Wells Fargo (N:WFC) Investment
Institute in Omaha, Nebraska.
"Today's numbers probably reinforce the fact they probably
move in December ... We think we could be set up for a little
bit of a rally here into year-end."
A broad worldwide index of equities was lower, losing 0.6
percent.
The dollar rose more than 1 percent against most major
currencies such as the euro EUR= , the yen JPY= and the
British pound GBP=D4 .
Sterling fell to a six-month low against the dollar and also
slipped against the euro, a day after it was sent tumbling after
the Bank of England kicked a UK rate hike down the road.
urn:newsml:reuters.com:*:nL8N13040J
It fell to $1.5073, down 0.9 percent on day.
The stronger dollar added downward pressure to crude oil,
which was already dragged down by oversupply concerns, and to
OPEC currencies.
U.S. crude CLc1 fell 1.8 percent to $44.39 a barrel, after
falling more than 2 percent in the previous session. Brent
LCOc1 dropped 1.1 percent to $47.43 a barrel.
Spot gold XAU= was down to $1,086 an ounce, a three-month
low, and on track for a 4.5 percent loss for the week.
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U.S. non-farm payrolls http://link.reuters.com/hat85v
Currencies vs dollar http://link.reuters.com/tak27s
Global assets in 2015 http://link.reuters.com/dub25t
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