Global stocks inch up as muted US jobs data eases pressure on the Fed, oil gains after pipeline cyber attack

Global stocks inch up as muted US jobs data eases pressure on the Fed, oil gains after pipeline cyber attack
Lucas Jackson/Reuters
  • Global stocks edged up after muted US jobs data relieved pressure on the Federal Reserve to react to an overheating economy.
  • The data also calmed investors' inflation worries, which have driven bond yields up this year.
  • Oil futures rose after a major US pipeline was targeted in a cyberattack over the weekend.

Global stocks mostly rose modestly on Monday after weaker read of US monthly employment last week helped soothe some concern among investors over an overheating economy that could force the Federal Reserve to raise interest rates more quickly than currently anticipated.

The US Labor Department on Friday said just 266,000 non-farm jobs were added in April rather than the expected over 1 million. Unemployment rose by 0.1% rather than being in line with predictions and falling.

"While inflation fears will continue to linger around, investors can relax for a bit.", Milan Cutkovic, Market Analyst at AxiCorp commented. "With US jobs figures falling far short of expectations, investors see the chances of an early rate hike by the Federal Reserve declining. The central bank reiterated its dovish stance at the last meeting, and recent data reaffirmed to investors that it will keep its ultra-loose monetary policy intact for a longer period." he continued.

Dow Jones futures were last up 0.2%, whilst S&P futures were flat and Nasdaq futures declined by around 0.36% on Monday morning. Tech stocks saw a sell-off last week as trading levels slowed down, which led to the third consecutive week of losses for the Nasdaq.

But not all analysts agreed that the jobs report had no implications for inflation.


"This report can still be seen as inflationary. This was perhaps illustrated by the fact that 10yr breakevens rose above 2.50% on Friday (+5bps on the day) and to their highest levels since April 2013." Jim Reid, research strategist at Deutsche Bank said in a note.

US 10 year Treasury yields were last at 1.59% on Monday, up 1.1 basis points.

Asian indices were boosted by rising commodities prices and appeared largely unaffected by the weak US nonfarm job data and rising COVID-19 cases across the continent. The Japanese Nikkei 225 closed 0.55% up and China's Shanghai Composite gained 0.27%.

"Shanghai Steel Rebar futures opened 10% higher and are now still 6.0% higher. Iron ore futures are 7.70% higher, while copper has gained 2.0%. So, while the US Non-Farm Payrolls post-mortems continue, as far as Asia is concerned, the global recovery is Thunderbirds Are Go." Jeffrey Halley, APAC senior markets analyst at OANDA said.

Oil futures rose after a key US pipeline was targeted in a cyberattack over the weekend. The attack led to the shutdown of the Colonial pipeline - the country's largest pipeline that carries around 2.5 million barrels a day, or around 45% of the East Coast's fuel needs.


WTI futures last traded 0.57% higher at $65.27 per barrel and Brent crude contracts were last up 0.6%, trading at $68.69.

After a record-breaking week, European markets had a subdued start on Monday. London's FTSE 100 was flat, whilst the German DAX was last down 0.13% and the eurozone-wide Euro Stoxx 50 was last down 0.29%.