Saturday, 3 September 2016

Stocks rise as Fed seen less likely to raise rates after US August jobs report

Markets were mostly up on Friday.

The S&P 500 rose 0.4 percent, the STOXX Europe 600 jumped 2 percent and the MSCI Emerging Markets Index climbed 1 percent.

US 10-year Treasury yields rose three basis points to 1.60 percent.

However, US employment rose by 151,000 in August, less than forecast and a 275,000 gain in July.

Bill Gross, manager of the Janus Global Unconstrained Bond Fund, said a Federal Reserve rate hike in September “is on” but Mariann Montagne, a senior investment analyst at Gradient Investments Group, said the latest economic data “indicate the Fed is less likely to raise rates” and Scott Mather, chief investment officer of US core strategies and a managing director at Pimco, said that “September is very unlikely”.

Traders lowered the probability of a Fed rate hike in September to 32 percent on Friday from 34 percent before the jobs data.

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