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TOKYO (Reuters)-Global stock markets rose to 1 1/2-month highs on Monday after data showed that US employment has surged and US Treasuries are under pressure as the market fears that the Fed may raise interest rates faster than expected.
US futures rose 0.5%, maintaining the gains during the down period last Friday, although the high-tech Nasdaq futures followed closely and trading was almost flat.
In Asia, it rose by 0.8%, while MSCI̵
The world index of all countries/regions of MSCI is almost flat, but it is still close to the highest level since the end of February, and is near the record high point set in the month.
The US Department of Labor said on Friday that non-agricultural employment surged by 916,000 last month, the largest increase since August last year.
This is much higher than economists’ expectations of a median of 647,000, and close to the market’s whispers of millions. The February figures were also revised higher to show that 468,000 jobs were created instead of the previously reported 379,000.
Koichi Fujidai, a senior economist at Daiichi Life Research, said: “As restaurants start to reopen, there will be further improvements in April. People expect economic normalization to happen sooner or later, but the pace seems to be accelerating.”
Although the number of employed people is still 8.4 million below the peak in February 2020, the accelerated recovery has made people hope that all jobs lost during the pandemic will be made up by the end of next year.
In turn, the prospect of regaining full employment has raised questions about the Fed’s ability to comply with its commitment to maintain interest rates by 2023.
The market strongly doubts this. By the end of next year, all Fed fund futures will raise interest rates.
Many market participants also expect that although Fed officials have indicated that the issue has not yet been discussed, the Fed will consider reducing its bond purchases this year.
Kozo Koide, chief economist at Asset Management One, said: “The Fed cannot avoid discussing plans to reduce loans before the fall,” he pointed out that US President Joe Biden (Joe Biden)’s infrastructure spending plan is likely to be passed at that time.
The yield on the US two-year Treasury bond rose to 0.186%, close to the eight-month high of 0.194% reached at the end of February.
The yield on longer-term bonds has also risen. On Monday, the Asian 10-year Treasury bond yield was 1.725%, continuing the upward trend that began on Friday after the release of the employment report.
Strong employment data helped support the U.S. dollar.
The dollar was trading at 110.57 yen against the yen, not far from Wednesday’s one-year high of 110.97. The euro was quoted at 1.1767 US dollars against the US dollar.
Gold fell 0.4% to 1,724.70 US dollars.
Among crypto assets, Ether fell 1.7% to US$2040.21 from the record high of US$2144.99 last Friday. It fell 0.9% to 57,704 U.S. dollars.
Oil prices fell after OPEC+ agreed last week to gradually ease some of the production cuts from May to July.
Crude oil futures fell 0.6% to US$61.09 per barrel.