S&P 500 slips, but losses kept in check as Nvidia climbs ahead of results
* MSCI World share index +0.2% on course for fourth straight
of gains
* China blue-chips +1.6% after Caixin PMI provides positive
surprise
* Dollar, U.S. yields claw higher after U.S. jobs growth
slows
less than expected
By Marc Jones
LONDON, Nov 1 (Reuters) - Shares globally were just 2.5%
short of an all-time high on Friday, as a surprise bounce in
Chinese manufacturing and some reassuring U.S. jobs numbers
eclipsed a blizzard of otherwise sickly global data.
Reports of more U.S.-China trade difficulties, impeachment
strains on Washington, the first day at the ECB without Mario
Draghi and Brexit jockeying were all in the mix too, but markets
marched on.
Wall Street's S&P 500 looked to be heading back towards a
record high after payrolls growth slowed less than expected
and Europe's STOXX 600 .STOXX extended its gains
to 0.6%, having also been lifted by the news that China's
factory activity expanded at the fastest pace in more than two
years.
That had helped Asia too. Chinese blue chips .CSI300
jumped 1.7% in their best day since mid-August, Seoul's Kospi
.KS11 rose 0.8% and Hong Kong's Hang Seng .HSI added 0.7%
despite data confirming protests there had pushed city into its
first recession in a decade. "I think it was a very good U.S. payrolls report, especially
if you take into account there was a strike at GM and census
workers left (after the census finished), said Rabobank's Philip
Marey said.
"It shows that at least the job motor is still running in
the U.S."
There had been a slight wobble in sentiment overnight after
a Bloomberg report citing unnamed Chinese officials airing
doubts over whether a comprehensive long-term trade deal is
possible, but it seemed to have passed. The initial "phase one" pact, aimed at ending the bruising
16-month trade war, appears to be in "good shape" and is likely
to be signed around mid-November, U.S. Commerce Secretary Wilbur
Ross said in a Fox interview on Friday. The pact was to be sealed in Chile at an Asia-Pacific trade
meeting, but the host country cancelled the summit amid
widespread protests against the government.
Monthly U.S. payrolls figures are always closely scrutinised
by traders as an up-to-date gauge of U.S. economic health.
Friday's batch showed they increased by 128,000 last month, well
above forecasts of 89,000 new jobs.
The economy also created 95,000 more jobs in August and
September than previously estimated and average hourly earnings
increased 6 cents, or 0.2%, after being unchanged in September.
That put the annual increase in wages to 3.0% in October.
It all helped lift the spirits of a dollar heading for its
fourth weekly drop in the last five.
The greenback clawed back above 108 yen JPY= but was on
track for its biggest weekly loss against the Japanese currency
since Oct. 4.
Earlier it had also hit a 10-day low versus the euro at
$1.1165, EUR=EBS after the Federal Reserve cut U.S. interest
rates for a third time this year on Wednesday. There was still ISM manufacturing PMI data to come later. It
is expected to see a rise to 48.9 from 47.8 in September but a
separate PMI survey from the Chicago Fed USCPMI=ECI on
Thursday had shown a sharper contraction in Midwestern
manufacturing activity for October.
OIL PRESSURE
Government bond yields - which move inversely to a bond's
price - were also lifted by the U.S. jobs data.
Benchmark U.S. Treasuries were offering 1.7% and euro zone
yields inched higher too though they were still on course for
their biggest weekly decline in five weeks as Christine Lagarde
officially began her presidency of the European Central Bank.
Analysts said the resumption of asset purchases by the ECB
this week had also been helping the bond markets, though focus
is already turning to what Lagarde will do during her eight-year
term.
The decision to resume asset purchases has divided the
central bank and fuelled a perception in markets that the bar to
further monetary easing is now high.
Having discounted an ECB depo rate of close to -0.8% just a
couple of months ago, the market no longer expects another cut
of 10 basis points in 2020 ECBWATCH .
"It's pretty clear that Lagarde has an uphill task in trying
to promote unity that leads to a coherent set of policies going
forward," said Philip Shaw, chief economist at Investec. "Her
own views can be characterised as continuity with" former ECB
chief Mario Draghi.
Among the main commodities, oil prices were little changed
on Friday but set for a slide of around 3.5% on the week, hurt
by rising global supply and concerns about future demand. O/R
U.S. crude inventories USOILC=ECI rose by 5.7 million
barrels in the week to Oct. 25, dwarfing analyst expectations
for an increase of just 494,000 barrels.
Brent crude LCOc1 ticked up 27 cents, or 0.4%, at $59.89 a
barrel by 0955 GMT, on course for a drop of about 3.4% for the
week.
West Texas Intermediate crude CLc1 rose 32 cents to $54.50 a
barrel, which would leave it with a weekly loss of more than
3.8%.
China PMIs https://tmsnrt.rs/2N4shoL
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