Stocks, bonds rally on U.S. jobs data; sterling jumps

Fri May 8, 2015 4:25pm EDT
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By Richard Leong

NEW YORK (Reuters) - An April rebound in U.S. jobs growth boosted Wall Street and supported the dollar on Friday, while a surprise Conservative victory cast away fears of a hung British Parliament and sparked a rally in sterling and European stock markets.

Global bond markets recovered for a second day, focusing on weak aspects of the latest U.S. jobs report, which may cause the Federal Reserve to be even more cautious toward ending its near- zero interest rate policy later this year.

Oil prices posted their first weekly loss in a month. They gave up earlier gains tied to data showing a strong rise Chinese crude imports.

Gold edged higher following two days of losses as lower bond yields revived some appeal of holding the precious metal.

The April U.S. jobs data showed a solid 223,000 increase after a disappointing March, when hiring slowed sharply due partly to tough weather. The unemployment rate dropped to 5.4 percent in April, near a seven-year low.

"It truly isolated the March miss as an anomaly. The labor market is back on track," said Phil Orlando, chief equity market strategist at Federated Investors Inc in New York.

The April hiring snapback, however, was less impressive after a further downward revision of March's weak reading to 85,000. The perception of the April data was also undercut by a meager 0.1 percent rise in average hourly earnings.

The April jobs figures put the Fed on track for a rate increase as early as September, a Reuters poll showed. But U.S. short-term interest-rate futures implied traders don't expect a Fed rate hike until December at the earliest, based on CME FedWatch.   Continued...

Traders work on the floor of the New York Stock Exchange May 6, 2015. REUTERS/Brendan McDermid