The three key Wall Street indices slipped on Friday as key jobs data came in stronger than expected, heightening speculation the Fed will raise rates later this month.
S&P 500: -0.4%Dow: -0.5%Nasdaq: -0.3%
US non-farm payrolls rose by 162,000 jobs last month against a forecast 56,000 gain. July jobs numbers were also revised up to a gain of 21,000 from the previously reported drop of 23,000. The unemployment rate held steady at 4.1%.
Two-year yields, which are particularly sensitive to changes in monetary policy, led the rise in Treasuries and were last up 4 basis points at 4.37%.
The yield on 10-year Treasury notes was up nearly 2 basis points to about 4.78%.
“Good news for the economy, but not such good news for those hoping the Fed will sit tight at the 16 September board meeting,” IG Markets Tony Sycamore said.
Futures traders on the ASX 200 couldn’t decide if it was good or bad news and remained on the fence.
When the market closed on Saturday morning (AEST), a fall of 1 point, or 0.01%, was priced in.
The moves were more definitive on the oil markets. The global Brent and US WTI benchmarks rose again as missiles and drones continued to whiz about the Strait of Hormuz.
Brent futures: +0.8% to $US92.68/barrelWTI futures: +0.2% to $US91.48/barrel
Over the week, Brent rose 8%, while US crude gained 10%.
Reuters reported US diesel prices hit a record high leading into the weekend.
The rally in oil prices combined with a much steeper fuel price increase has pushed inflation and government borrowing costs higher around the world and intensified fears that global economic growth might pull back without some relief.
“All sectors of the economy are affected by diesel,” Rystad Energy chief economist Claudio Galimberti told Reuters.
Oil prices may well take another step up today after US forces struck and disabled three Iranian oil tankers in response to Iran targeting two US warships with ballistic missiles.
The barrage was followed by a social media volley from US Admiral Brad Cooper.
Despite US Treasuries pushing the US dollar higher, the Aussie dollar was relatively unmoved and closed the week at 72.04 US cents, its highest weekly close in four months.
And gold slipped as the odds of a Fed hike in September shortened.
Copper posted its 10th consecutive week of gains and moved closer to its record high of $US14,527/tonne.
Iron ore also edged higher to just under $US100/tonne.
With Reuters