* Europe stocks follow Asia up, Wall St seen higher
* Euro zone bond yields dip on ECB action prospect
* Dollar dips but yen drops on chance of looser BOJ
* Oil up as Russia says willing to discuss market
By Nigel Stephenson
LONDON, Oct 5 (Reuters) - European shares rose sharply on
Monday, following Asian stocks higher, while the dollar was on
the defensive after Friday's weak U.S. jobs data signalled the
era of low-cost money had further to run.
Wall Street, which gained on Friday after the market saw the
data pushing back the first Federal Reserve rate hike since
2006, was expected to rise later on Monday, index futures showed
ESc1 .
Friday's data showed just 142,000 more U.S. jobs were
created last month, compared with a forecast of 203,000, and
that hourly wage growth fell. ID:nLNN2LEBGC
This fuelled doubts over whether the world's largest economy
was strong enough to withstand an interest rate rise before the
end of the year and meant the cheap funds that have lifted
financial assets across the globe would be around for a while.
"After the (jobs) figures in the U.S., the market is more
and more convinced that the Fed will delay rate hikes and the
probability that the ECB (European Central Bank) will deliver
more is also becoming a central scenario," said BNP Paribas (PARIS:BNPP) rate
strategist Patrick Jacq.
Others said the Bank of Japan could ease policy as soon as
this week, though action at its Oct. 30 meeting may be more
likely. ID:nL3N125199
Before Friday's data, the Fed had been widely expected to
raise U.S. interest rates before the end of the year. It decided
not to move in September because of anxiety in global markets
about China's slowing economic growth.
The pan-European FTSEurofirst 300 .FTEU3 stocks index rose
2.5 percent to its highest since Sept. 22. France's CAC index
.FCHI gained more than 3.4 percent after forecast-beating
business activity data. ID:nL9N0YN021 ID:nL9N0YN023
"The economic data in France was today's surprise," said
Andrea Cuturi, chief investment officer at asset manager
Anthilia Capital.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose to a two-week high and was last up 2.1
percent, while Japan's Nikkei .N225 closed up 1.6 percent.
Wall Street had already risen on Friday, and S&P index
futures ESc1 signalled further modest gains later on Monday.
Chinese markets were closed for a holiday.
The dollar edged lower against a basket of currencies .DXY
but remained well above lows struck after Friday's numbers.
The euro EUR= was up 0.2 percent at $1.1229, although the
yen JPY= was down 0.4 percent at 120.27 per dollar as some
analysts suspect the Bank of Japan could unveil further monetary
easing measures as early as Wednesday.
Yujiro Goto, currency strategist at Nomura, said: "The
euro's rise above $1.13 could be capped, while dollar/yen is
likely to be supported at 120 yen."
With stocks on the up, yields on low-risk government debt
also rose. German 10-year government bonds DE10YT=TWEB , the
euro zone benchmark, added 3.9 basis points to 0.55 percent and
10-year U.S. Treasury yields US10YT=RR rose 2 bps to 2.01
percent.
Portuguese 10-year yields PT10YT=TWEB initially hit a
five-month low after the centre-right government of Prime
Minister Pedro Passos Coelho won an election on Sunday that was
a test of its tough austerity stance. ID:nL8N12404A
They last traded at 2.34 percent, up 2.5 bps.
Oil prices, which rose 1 percent on Friday after the number
of active U.S. oil rigs fell for a fifth consecutive week, made
further gains as Russian said it would be willing to discuss the
oil market with fellow producers. Crude prices have more than
halved since mid-2014.
Brent LCOc1 was last up 63 cents at $48.76 a barrel.
"Investors seem to expect a possible reduction in oil output
to be agreed during rebalancing procedures," said Yoo-jin Kang,
commodities analyst at NH Investment & Securities based in
Seoul.
Gold XAU= slipped as stocks rose and last traded at
$1,132.50 an ounce, having largely held on to gains made in its
biggest one-day jump in nine years on Friday.