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GLOBAL MARKETS-Stocks gain, U.S. short-dated debts under pressure after bumper U.S. jobs data

Published 2021-04-04, 08:48 p/m
© Reuters.

* U.S. stock futures up 0.5%, Nikkei up

* Short-term U.S. debt up, markets bet on 2022 rate hike

* Global asset performance http://tmsnrt.rs/2yaDPgn

* World FX rates http://tmsnrt.rs/2egbfVh

By Hideyuki Sano

TOKYO, April 5 (Reuters) - Global stock prices rose to a 1 1/2-month high on Monday after data showing a surge in U.S. employment while short-dated U.S. bonds came under pressure on worries the Federal Reserve may bump up interest rates sooner than it has indicated.

U.S. S&P500 futures ESc1 traded 0.5% higher, maintaining their gains made during a truncated session on Friday while Japan's Nikkei .N225 rose 0.8%.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was almost flat, with China closed for Tomb-Sweeping day and Australia on Easter Monday.

MSCI's all-country world index .MIWD00000PUS was almost flat but stood near its highest level since late February and within sight of a record high set that month.

The U.S. labour department said on Friday that nonfarm payrolls surged by 916,000 jobs last month, the biggest gain since last August. was well above economists' median forecast of 647,000 and was closer to markets' whisper number of one million. Data for February was also revised higher to show 468,000 jobs created instead of the previously reported 379,000.

"The data confirmed that the U.S. economic activity is coming back as coronavirus vaccinations are well under way," said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui DS Asset Management.

While employment remains 8.4 million jobs below its peak in February 2020, an accelerating recovery raised hopes the all the jobs lost during the pandemic could be recouped by the end of next year.

The prospects of a return to a full employment, in turn, raises question about whether the Fed can stick to its pledge that it will keep interest rates through 2023.

Markets have strong doubts, with Fed funds futures FFZ2 FFF3 fully priced in one rate hike by the end of next year.

"Markets are surely not convinced that the Fed can be that relaxed when we have very strong jobs data while the government is proposing another massive stimulus," Sumitomo Mitsui's Ichikawa said.

The two-year U.S. Treasury yield rose to 0.186% US2YT=RR , near its eight-month peak of 0.194% touched in late February.

Yields on longer-dated bonds were more subdued, with 10-year notes yield slipping to 1.706% US10YT=RR on Monday, giving up a part of its 4-basis-point rise made on Friday following the job report.

The strong jobs data helped to underpin the dollar.

The greenback traded at 110.72 yen JPY= , near Wednesday's one-year peak of 110.97. The euro stood at $1.1762 EUR= .

In crypto assets, ether ETH=BTSP held at $2,075.67 near Friday's record peak of $2,144.99. Bitcoin stood at $58,146 BTC=BTSP after 4.3% gains last week.

Oil prices dipped after OPEC+ agreed last week to gradually ease some of its production cuts between May and July. crude futures CLc1 fell 0.5% to $61.16 per barrel.

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http://tmsnrt.rs/2yaDPgn

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