London (AFP) – Strong US jobs numbers gave global stock markets and the dollar a shot in the arm on Friday, providing fresh evidence for the rude health of the world’s top economy.
The Labor Department reported that the US economy added 266,000 net new jobs in November, vastly higher than market expectations of around 190,000, taking the unemployment rate to 3.5 percent.
In addition, the previous month’s numbers were revised up.
“It’s not only hard to find any weakness but hard to find anything that isn’t strong,” XTB analyst David Cheetham said of the jobs report which he called “all around stellar”.
European equity markets promptly extended earlier gains, with some up well over one percent at the close, as the news of American economic strength outweighed concerns about a plunge in German October industrial output.
Wall Street posted solid advances in the late New York morning.
The dollar also powered ahead against its main rivals.
– OPEC boosts oil –
Oil prices, meanwhile, surged after OPEC and its allies — including Russia — agreed a production cut of 500,000 barrels per day in addition to their current agreement.
Oil prices had started the European day soft as doubts about OPEC’s ability to hammer out a deal on a second day of deliberations crept in after a late session on Thursday provided no breakthrough.
But then news of the agreed cuts, which will be compounded by voluntary additional cuts including by OPEC kingpin Saudi Arabia, sent oil futures flying.
“Oil prices have reversed higher in the wake of the two-day OPEC+ meeting, which concluded with a pledge of deeper production cuts,” said Charles Schwab analysts.
“Moreover, although there was some disappointment that the OPEC+ agreement looks to run only through March, Saudi Arabia’s announcement of cuts beyond what was agreed to seems to be overshadowing it,” they added.
– ‘Strange week’ –
On the trade front, stock markets appeared more optimistic towards China-US talks, with investors betting the two will eventually sign a partial deal, though they remain nervous as next week’s deadline for fresh tariffs draws closer.
Sentiment across trading floors has ebbed and flowed through the week as observers try to gauge the state of play in the long-running negotiations, with both sides making positive, then negative comments on the outlook.
China on Friday offered its latest olive branch, saying it would waive tariffs on “some” imports of key US soybean and pork imports.
“It’s been rather a strange week for global equity markets,” said Michael Hewson, analyst at CMC Markets UK.
“Moving from an expectation that we could well see some movement on trade between the US and China in the next couple of weeks, to the prospect that any solution may well not happen until after the next (American) presidential election,” he said.
– Key figures around 1640 GMT –
London – FTSE 100: UP 1.4 percent at 7,239.66 points (close)
Frankfurt – DAX 30: UP 0.9 percent at 13,166.58 (close)
Paris – CAC 40: UP 1.2 percent at 5,871.91 (close)
EURO STOXX 50: UP 1.2 percent at 3,692.34
New York – Dow: UP 1.2 percent at 27,997.49
Tokyo – Nikkei 225: UP 0.2 percent at 23,354.40 (close)
Hong Kong – Hang Seng: UP 1.1 percent at 26,498.37 (close)
Shanghai – Composite: UP 0.4 percent at 2,912.01 (close)
Euro/dollar: DOWN at $1.1049 from $1.1104 at 2200 GMT
Pound/dollar: DOWN at $1.3116 from $1.3157
Euro/pound: DOWN at 84.24 pence from 84.40 pence
Dollar/yen: UP at 108.78 yen from 108.76 yen
Brent North Sea crude: UP 1.2 percent at $64.13 per barrel
West Texas Intermediate: UP 1.1 percent at $59.11