Stock markets wavered on Friday as a solid US jobs report raised expectations of an aggressive US interest rate hike to tame runaway inflation.
Oil prices, meanwhile, fell slightly, with the US benchmark WTI contract dipping under $100 as US allies agreed to tap their emergency stockpiles again in a bid to calm the market.
While Russia’s war in Ukraine remains at the forefront of investor concerns, they were also tracking the latest US jobs picture as it serves as a barometer of the health of the world’s biggest economy.
The United States added 431,000 jobs in March and the unemployment rate fell to 3.6 percent, bringing the labour market closer to where it was before the Covid-19 pandemic began, according to official data.
The figures also fed into expectations of the next move by the US Federal Reserve, which has begun to raise interest rates in a bid to rein in a surge in inflation that has threatened to derail the economic recovery from the pandemic.
Higher rates, however, can also put the brakes on economic growth.
Analysts said they now expect the Fed to enact a half-point rate hike in May, higher than the quarter-point increase decided at its last meeting.
“The employment report showed strong jobs growth, a lower unemployment rate, and sustained wage inflation — a recipe for the Fed to issue a 50-basis-point hike next month,” market analysis firm Briefing.com said in a note.
Wall Street fell in midday trading after opening on a high note, but European equities finished the day in positive territory while Asian markets were mixed to end the week.
“This continues to be a very headline-driven market and they’re coming thick and fast,” said Craig Erlam, senior market analyst at OANDA foreign exchange platform.
“Talks between Ukraine and Russia are progressing well, it seems, but things can change rapidly, for better or worse. Until we see a deal, the situation will continue to feel precariously balanced and investors will remain on edge as a result,” he said.
Fallout from the war sent consumer prices in the eurozone surging by a record 7.5 percent, EU statistics agency Eurostat said heading into the weekend.
– IEA emergency meeting –
In a bid to ease oil prices, the 31-nation International Energy Agency agreed to tap emergency oil reserves again at an emergency ministerial meeting following a pledge to release over 60 million barrels.
The IEA, whose members include the United States, European countries, Japan and other nations allied to Washington, said it would make the new amount public early next week.
US President Joe Biden said that the countries had agreed to release “tens of millions of additional barrels of oil onto the market”.
“The IEA Ministers reiterated their concerns about the energy security impacts of the egregious actions by Russia and voiced support for sanctions imposed by the international community in response,” the group said in a statement.
The announcement came a day after Biden announced a record release of oil onto the market — one million barrels of US government oil every day for six months in a bid to ease prices.
Biden described the move as a “wartime” measure that will defuse Russia’s leverage as an energy power.
Washington has pressed the OPEC+ group of oil producing countries, led by Saudi Arabia and Russia, to boost its output but the group on Thursday agreed on another modest increase instead.
The war has driven oil prices to near record heights over concerns about supplies as Russia is the world’s second biggest exporter of crude after Saudi Arabia.
– Key figures around 1630 GMT –
New York – Dow: DOWN 0.2 percent at 34,609.91 points
London – FTSE 100: UP 0.3 percent at 7,537.90 (close)
Frankfurt – DAX: UP 0.2 percent at 14,446.48 (close)
Paris – CAC 40: UP 0.4 percent at 6,684.31 (close)
EURO STOXX 50: UP 0.6 percent at 3,927.44
Tokyo – Nikkei 225: DOWN 0.6 percent at 27,665.98 (close)
Hong Kong – Hang Seng Index: UP 0.2 percent at 22,039.55 (close)
Shanghai – Composite: UP 0.9 percent at 3,282.72 (close)
Brent North Sea crude: DOWN 0.5 percent at $104.20 per barrel
West Texas Intermediate: DOWN 1.0 percent at $99.26 per barrel
Euro/dollar: DOWN at $1.1046 from $1.1067 late Thursday
Pound/dollar: DOWN at $1.3111 from $1.3143
Euro/pound: UP at 84.25 pence from 84.20 pence
Dollar/yen: UP at 122.60 yen from 121.69 yen
