GLOBAL MARKETS-Hopes for stimulus drive risky assets higher despite weak U.S. jobs report

By David Randall
NEW YORK, Dec 4 (Reuters) - Growing prospects for a U.S.
coronavirus relief package after a grim employment report helped
boost demand for riskier assets on Friday, taking the dollar to
a new 2-1/2-year low and pushing oil prices to their highest
levels since March when widespread lockdowns aimed at curtailing
the pandemic took effect.
U.S. Treasury bonds, meanwhile, dipped in anticipation of
increased borrowing to fund economic recovery measures.
The U.S. economy added the fewest workers in six months in
November, with nonfarm payrolls increasing by 245,000 jobs last
month after rising by 610,000 in October, the Labor Department
said on Friday. Economists polled by Reuters had forecast
payrolls would increase by 469,000 jobs in November.
"It shows that the economy is still not on firm footing and
we need stimulus. The revitalized conversations are important,
and this shows that ultimately maybe a bad number will get the
politicians to push forward a bit faster," said Marvin Loh,
senior global macro strategist at State Street Global Markets.
A bipartisan, $908 billion coronavirus aid plan gained
momentum in the U.S. Congress on Thursday as conservative
lawmakers expressed their support. MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.30% following mixed trading in Asia and modest gains in
Europe.
In morning trading on Wall Street, the Dow Jones Industrial
Average .DJI rose 76.68 points, or 0.26%, to 30,046.2, the S&P
500 .SPX gained 8.13 points, or 0.22%, to 3,674.85 and the
Nasdaq Composite .IXIC added 11.19 points, or 0.09%, to
12,388.38.
The broadly upbeat mood saw the U.S. dollar lose ground to
other major currencies.
"One of the elements of the better news we are getting, for
instance the vaccine, is to increase the attraction of risky
assets, and that reduces the appetite for the U.S. dollar," said
Eric Brard, head of fixed income at asset manager Amundi.
The euro EUR= hit its highest since April 2018 against the
dollar and was last at $1.2172, a weekly gain of more than 1.5%.
The dollar index =USD fell 0.163%, near its lowest since May
2018.
Benchmark U.S. 10-year Treasury notes US10YT=RR last fell
12/32 in price to yield 0.9592%, up from 0.921% late on
Thursday.
"November's report is the weakest monthly jobs number of the
pandemic rebound, and markets are clearly betting that today's
result will pull forward stimulus talks, necessitating greater
supply," said Guy LeBas, chief fixed income strategist at Janney
Montgomery Scott.
German industrial orders rose more than expected on the
month in October, data showed on Friday, raising hopes the
manufacturing sector in Europe's biggest economy started the
fourth quarter on a solid footing during a second wave of the
pandemic. Oil prices got an additional lift after OPEC and Russia
agreed to reduce their deep oil output cuts from January by
500,000 barrels per day. The increase means the Organization of the Petroleum
Exporting Countries and Russia, a group known as OPEC+, would
move to cut production by 7.2 million barrels per day, or 7% of
global demand from January, compared with current cuts of 7.7
million barrels per day.
U.S. crude CLc1 rose 0.5% to $45.87 per barrel and Brent
LCOc1 was at $49.01, up 0.62% on the day.
Spot gold XAU= added 0.4% to $1,847.28 an ounce. U.S. gold
futures GCc1 gained 0.03% to $1,837.40 an ounce.

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