* U.S. payrolls beat expectations, lift odds for Fed rate
hike
* Dollar jumps 1 percent, U.S. bonds yields also rise
* U.S. stocks fall, but European shares rise, led by
exporters
(Adds close of European markets)
By Herbert Lash
NEW YORK, Nov 6 (Reuters) - The dollar jumped to a
seven-month high, pushing oil prices lower, and short-term U.S.
bond yields rose to their highest in five years on Friday after
strong U.S. jobs data bolstered expectations that the Federal
Reserve will raise interest rates in December.
Non-farm payrolls increased 271,000 in October, the largest
rise since December, while average hourly earnings rose a
respectable 9 cents, the Labor Department said. The unemployment
rate of 5.0 percent is the lowest since April 2008 and is in a
range many Fed officials consider full employment.
The robust report boosted the likelihood that the Fed will
raise rates before year's end for the first time in almost a
decade, ending years of easy monetary policy.
"This is a blow-out number," said Kevin Giddis, head of
fixed income capital markets at Raymond James in Memphis,
Tennessee. "There's a pretty strong feeling that the Fed is
going to hike rates a quarter of a point in December."
Kathy Lien, managing director at BK Asset Management in New
York, said: "You're going to see a renewed appetite for U.S.
dollars."
The dollar index .DXY of six major trading currencies hit
a high of 99.345, its strongest level since mid-April. It was
last up 1.29 percent at 99.187.
The euro fell to $1.708 EUR= , its lowest since April, and
last traded down 1.48 percent at $1.0720.
Against the yen, the dollar rose to 123.26 yen JPY= , its
highest since Aug. 21, and last traded at 123.21, up 1.21
percent.
Oil prices fell for the third straight day, on track for
their third weekly decline in four, as the strong dollar makes
commodities denominated in the greenback less affordable to
holders of other currencies. urn:newsml:reuters.com:*:nLNN6MEBHQ
Brent LCOc1 , the global benchmark for oil, fell 54 cents
to $47.44 a barrel. U.S. crude CLc1 slid 86 cents to $44.34.
Yields on U.S. government debt soared.
U.S. two-year US2YT=RR yields hit 0.958 percent, their
highest since May 2010, on expectations of a December rate hike.
Benchmark 10-year yields hit a three-month high of 2.349
percent.
Global equity markets were mixed. European shares were
higher, but a measure of worldwide stock performance was lower,
as were most U.S. stocks.
MSCI's all-country world index .MIWD00000PUS fell 0.81
percent.
European stocks rose on the stronger dollar, which lifted
export-oriented shares like autos. The pan-European FTSEurofirst
300 index .FTEU3 closed up 0.27 percent at 1,498.99, while
Germany's export-heavy DAX .GDAXI outperformed to gain 0.92
percent.
The Dow Jones industrial average .DJI fell 44.66 points,
or 0.25 percent, to 17,818.77. The S&P 500 .SPX slid 10.68
points, or 0.51 percent, to 2,089.25, and the Nasdaq Composite
.IXIC added 1.32 points, or 0.03 percent, to 5,129.06.
Stock investors are struggling with the prospect of a Fed
tightening and the economic reason behind it, said Brad
McMillan, chief investment officer at Commonwealth Financial in
Waltham, Massachusetts.
But the unemployment report shows a recent soft spot in jobs
data did not indicate a trend, McMillan said.
"The economy is now strong enough to take a slowdown and to
continue to move forward strongly," he said, "and that's
actually very encouraging for the next 12 to 18 months or so
because it says we got some very strong momentum here."
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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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