Jobs figure jolts European markets, dollar higher

Jobs figure jolts European markets, dollar higher

LSE London Stock Exchange
Logo of the London Stock Exchange.

LONDON: US equities were on track for a tenth-straight record session on Tuesday (Aug 8) after jobs data jolted a languid summer trading session, with the dollar also shooting higher.

Wall Street had opened lower from record highs for the Dow Jones Industrial Average and S&P 500, and European equities were also lower in afternoon trading.

But much better data on US job openings from a survey called JOLTS shocked the market, leading equities on both sides of the Atlantic to push into positive territory.

"It seems that the JOLTS job openings reading - which far surpassed expectations at 6.16 million against last month's 5.67 million - mainly benefited the dollar, which is currently on the hunt for the faintest whiff of good news," said financial analyst Conner Campbell at Spreadex.

The euro had been buying US$1.1810 before the jobs data were released, but quickly fell to US$1.1733.

Markets have been focusing in recent weeks on the possibility of another US interest rate hike this year, with the Fed concerned that the economy and inflation may be too soft.

A strong labour market helps push up wages and thus inflation.

Investors are also keenly waiting for US inflation numbers due later this week

In Europe, London's commodities-heavy FTSE 100 index of major blue-chip firms stocks ended the day with a 0.1 per cent gain.

But mining firms were penalised on the poor trade data from China, which is a top global consumer of many raw materials.

Chinese trade growth in July came in well below expectations after months of steady momentum.

Chinese exports rose 7.2 per cent year-on-year in June, undershooting a Bloomberg News forecast of 11 per cent, while imports climbed by 11 per cent compared with an expected increase of 18 per cent.

"China has been a major buyer of minerals in recent years and today's numbers show a slight softening for demand," said market analyst David Madden at CMC Markets. "Investors sold basic resource stocks like Anglo American, Rio Tinto, BHP Billiton, and Glencore," he added.

Some Asian bourses paused for breath in light summer holiday trading, after recording healthy gains Monday on optimism over global growth triggered by last week's strong US jobs report

In Tokyo a stronger yen, which weighs on exporters' profits, helped nose Japanese equities down as the greenback gave up some ground.

The Nikkei closed down 0.3 per cent, also dragged down by tech giant SoftBank slipping into negative territory as it announced a dive in April-June net profit.

But Hong Kong continued a month-long advance as traders prepared for more earnings from heavyweights including China Mobile.

Shanghai stocks were little changed despite the disappointing Chinese trade data.

Key figures around 1530 GMT:

London - FTSE 100: UP 0.1 per cent at 7,542.73 points (close)
Frankfurt - DAX 30: UP 0.3 per cent at 12,292.05 (close)
Paris - CAC 40: UP 0.2 per cent at 5,218.89 (close)
EURO STOXX 50: UP 0.3 per cent at 3,514.77
New York - Dow: UP 0.2 per cent at 22,154.72

Tokyo - Nikkei 225: DOWN 0.3 per cent at 19,996.01 (close)
Hong Kong - Hang Seng: UP 0.6 per cent at 27,854.91 (close)
Shanghai - Composite: UP less than 0.1 per cent at 3,281.87 (close)

Euro/dollar: DOWN at US$1.1737 from US$1.1794 at 2100 GMT on Monday
Pound/dollar: DOWN at US$1.2961 from US$1.3036
Dollar/yen: UP at 110.77 yen from 110.74 yen

Oil - Brent North Sea: UP five cents at US$52.42 per barrel
Oil - West Texas Intermediate: UP eight cents at US$49.47

Source: AFP/de