The Albany Gazette - Wall Street shrugs off strong jobs data

US hiring rose much more than expected last month, according to government data published Friday, keeping up the pressure on the Fed as it weighs when to start cutting interest rates.

The world's largest economy added 303,000 jobs in March, up from a revised 270,000 new jobs created a month earlier, the Department of Labor announced.

That was considerably higher than market forecasts of around 200,000 jobs.

The jobs figures are key data for the Fed in deciding whether the economy is growing at a rate that will see inflation slow further and it can begin cutting interest rates.

"This latest data set shows the US economy isn’t losing heat," said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown brokerage, with the data suggesting wages are likely to continue rising.

"Not only does this make the fight against inflation more difficult, it puts a potential pin in hopes for an interest rate cut in June," she added.

Nevertheless, Wall Street's three main indices rose at the start of trading.

Patrick O'Hare at Briefing.com said the jobs data "continued to support a solid earnings growth outlook even if it didn't necessarily support the outlook for the Fed to cut rates soon."

He pointed to data now showing the market pricing in a 56.7-percent chance of a 0.25-percentage point cut in interest rates in June, compared to a 65.9-percent chance on Thursday.

Mahmoud Alkudsi, senior market analyst at ADSS online brokerage, said he still expected the Fed to cut rates three times this year.

"The question remains on when the first cut will happen given that the recent strong data hasn’t created any sense of urgency," he said.

The prospect of US interest rates staying higher for longer boosted the dollar against its major rivals.

- 'Escalation of tensions' -

Global oil prices topped $91 a barrel as worries intensified that Israel's war with Hamas could spiral into a broader conflict with major crude producer Iran.

That dampened sentiment in Asia and Europe.

"The risk-off tone to markets is driven by an escalation of tensions in the Middle East, after Israel said that it had increased preparations for a retaliatory strike by Iran after Israeli forces attacked Iran's diplomatic compound in Syria earlier this week," said XTB analyst Kathleen Brooks.

"Ever since the Israel/Hamas war started in October, the bigger risk for geopolitical security and thus for financial markets, has been a war between Iran and Israel," she said.

That prospect sent oil prices up more than one percent Thursday, stoking fears of elevated global inflation that could delay rate reductions.

Gold prices remained elevated one day after striking another record pinnacle at $2,305.64 per ounce. Gold prices have been benefitting from the prospect of a drop in global interest rates as well as concern over unsustainable government debt levels.

- Key figures around 1330 GMT -

New York - Dow: UP less than 0.1 percent at 38,620.27 points

New York - S&P 500: UP 0.2 percent at 5,158.11

New York - Nasdaq Composite: UP 0.3 percent at 16,099.40

London - FTSE 100: DOWN 0.8 percent at 7,909.12

Paris - CAC 40: DOWN 1.3 at 8,043.11

Frankfurt - DAX: DOWN 1.3 percent at 18,166.17

EURO STOXX 50: DOWN 1.2 percent at 5,008.20

Tokyo - Nikkei 225: DOWN 2.0 percent at 38,992.08 (close)

Hong Kong - Hang Seng Index: FLAT at 16,723.92 (close)

Shanghai - Composite: Closed for a holiday

Dollar/yen: UP at 151.67 yen from 151.22 yen on Thursday

Euro/dollar: DOWN at $1.0799 from $1.0840

Pound/dollar: DOWN at $1.2588 from $1.2641

Euro/pound: UP at 85.79 pence from 85.73 pence

Brent North Sea Crude: UP 0.6 percent at $91.22 per barrel

West Texas Intermediate: UP 0.5 percent at $87.01 per barrel

burs-rl/kjm

(T.Brown--TAG)