Recovery hopes drive risky assets up despite weak US jobs report

NEW YORK (Reuters) – Growing prospects for a US coronavirus relief program after grim jobs report helped boost demand for riskier assets on Friday, taking the dollar to a new low of 2 -1 / 2 years and pushing oil prices to their highest levels since March, when widespread lockdowns aimed at reducing the pandemic went into effect.

US Treasuries, meanwhile, fell in anticipation of increased borrowing to fund economic recovery measures.

The US economy added the fewest workers in six months in November, with non-farm payrolls increasing 245,000 jobs last month after rising 610,000 in October, the Labor Department said Friday. Economists polled by Reuters had predicted that the wage bill would increase by 469,000 jobs in November.

“This shows that the economy is still not on a solid footing and that we need stimulus measures. Revitalized conversations are important, and it shows that in the end maybe a bad number will get politicians to move a little faster, ”said Marvin Loh, senior global macro-strategy strategist at State Street Global Markets.

A bipartisan, $ 908 billion coronavirus aid plan gained momentum in the U.S. Congress on Thursday as conservative lawmakers expressed support.

MSCI’s stock gauge across the world rose 0.30% after mixed trading in Asia and modest gains in Europe.

In morning trading on Wall Street, the Dow Jones Industrial Average rose 76.68 points, or 0.26%, to 30,046.2, the S&P 500 gained 8.13 points, or 0.22%, to 3,674 , 85 and the Nasdaq Composite added 11.19 points, or 0.09%, to 12,388.38.

The generally optimistic mood caused the US dollar to lose ground against other major currencies.

“One of the best news we get, say the vaccine, is to increase the attraction of risky assets, and that reduces appetite for the US dollar,” said Eric Brard, head of securities. fixed income with asset manager Amundi. .

The euro hit its highest since April 2018 against the dollar and was last at $ 1.2172, a weekly gain of over 1.5%. The dollar index fell 0.163%, near its lowest since May 2018.

Benchmark 10-year US Treasuries last fell 12/32 to a yield of 0.9592%, down from 0.921% on Thursday night.

“The November report is the lowest monthly job count in the pandemic rebound, and markets are clearly betting that today’s outcome will push stimulus talks forward, which will require a larger supply,” said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott.

German industrial orders rose more than expected during the month of October, data showed on Friday, raising hopes that the manufacturing sector of Europe’s largest economy has started the fourth quarter on solid footing when of a second wave of the pandemic.

Oil prices rose again after OPEC and Russia agreed to cut their oil production cuts from January by 500,000 barrels per day.

The increase means the Organization of the Petroleum Exporting Countries and Russia, a group known as OPEC +, would like to cut production by 7.2 million barrels per day, or 7% of global demand. from January, against current reductions of 7.7 million barrels per day. .

US crude rose 0.5% to $ 45.87 a barrel and Brent was at $ 49.01, up 0.62% on the day.

Spot gold added 0.4% to $ 1,847.28 an ounce. US gold futures gained 0.03% to $ 1,837.40 an ounce.