Stocks, dol­lar ease be­fore US pay­rolls

Kuwait Times - - BUSINESS -

Global stocks, oil and the dol­lar eased on Fri­day as in­vestors took a cau­tious stance be­fore US pay­rolls data, which may ce­ment the case for a Fed­eral Re­serve rate in­crease, and Italy’s ref­er­en­dum on con­sti­tu­tional re­form yes­ter­day.

Strong eco­nomic data from the United States, in­clud­ing up­beat man­u­fac­tur­ing ac­tiv­ity and con­struc­tion spend­ing, have bol­stered the view that the Fed will tighten mon­e­tary pol­icy faster than ex­pected to keep in­fla­tion­ary pres­sures in check. US em­ploy­ers prob­a­bly hired more peo­ple in Novem­ber amid grow­ing con­fi­dence in the econ­omy, mak­ing it al­most cer­tain that the Fed­eral Re­serve will raise in­ter­est rates later this month.

Stock fu­tures on Wall Street were down 0.3 per­cent. The S&P 500 is up more than 2 per­cent since the Novem­ber pres­i­den­tial elec­tion on hopes that Pres­i­den­t­elect Don­ald Trump’s poli­cies will stoke growth. Yields for 10-year US Trea­suries eased af­ter reach­ing an 18-month high of 2.492 per­cent overnight. The dol­lar was on course for its first weekly de­cline in four weeks against the euro and a bas­ket of cur­ren­cies as in­vestors trimmed bets fol­low­ing re­cent gains.

“I don’t think we need to over­com­pli­cate things to­day. You have the Fri­day fac­tor, there is al­ways a de­gree of re­serve be­fore pay­rolls. It does also feel as if liq­uid­ity is al­ready fall­ing ahead of the end of the year. Some peo­ple may be sit­ting back and wait­ing for Jan­uary,” said Neil Mel­lor, a strate­gist at BNY Mel­lon in London.

In Europe, the bench­mark STOXX 600 fell more than 1 per­cent dragged lower by in­dus­trial and fi­nan­cial stocks. Euro­pean stocks, down 12 per­cent this year, are the worst per­form­ers among ma­jor eq­uity in­dexes glob­ally and have un­der­per­formed peers in the US by about nearly 15 per­cent­age points this year. — Reuters

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