January 5, 2018 / 7:16 PM / 3 months ago

GLOBAL MARKETS-World stocks hit fresh highs, dollar undeterred by U.S. jobs report

* World shares continue push higher

* European stocks mark best week since April

* Dollar up after U.S. jobs report

* Zinc prices highest in decade (Updates to European trading close; adds commentary)

By Stephanie Kelly

NEW YORK, Jan 5 (Reuters) - World shares continued their strong start to 2018, with European stocks closing higher and Wall Street advancing, while the U.S. dollar reversed its losses against the euro after a brief dip following the U.S. jobs report.

MSCI’s gauge of stocks across the globe gained 0.51 percent, reaching a fresh record high on the day.

Throughout the first week of 2018, world shares have risen and several benchmarks have broken records. With the world’s largest economies all growing healthily at once and central banks moving slowly to tighten policy, investors have poured money into risk assets.

European shares scored their best week since last April on Friday, with the pan-European STOXX 600 closing up 0.93 percent and holding at a two-month high. Euro zone blue chips gained 1.09 percent on the day, notching the best performance since April.

Switzerland’s blue-chip SMI hit an all-time high, rising 0.50 percent, and Britain’s FTSE 100 also sailed to a new record and closed up 0.37 percent.

U.S. stocks also advanced on Friday as investors looked past weaker-than-expected U.S. job gains in December and focused on signs of a pick-up in wage growth.

Non-farm payrolls increased by 148,000 jobs last month, while economists had expected a rise of 190,000. Average hourly earnings rose 0.3 percent, compared to 0.1 percent in November.

“The market is shrugging it off because it’s not weak enough to detract the Fed from raising rates further. The modest rise in average hourly wage number should give the Fed some breathing room,” said Bryce Doty, senior portfolio manager at SIT Fixed Income Advisors LLC in Minneapolis.

Traders of U.S. short-term interest-rate futures continued to bet the Fed would raise interest rates just two times this year, heavily pricing in a March rate hike.

The Dow Jones Industrial Average last rose 107.77 points, or 0.43 percent, to 25,182.9, the S&P 500 gained 10.6 points, or 0.39 percent, to 2,734.59 and the Nasdaq Composite added 46.35 points, or 0.65 percent, to 7,124.26.

MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.73 percent higher, while Japan’s Nikkei rose 0.89 percent.

Emerging market stocks rose 0.68 percent.


The U.S. dollar rose on Friday, after a brief dip, after investors decided the U.S. December non-farm payrolls report would not stop the Federal Reserve from raising interest rates multiple times this year.

“It was a little disappointing. The market doesn’t care. The margin of error on this number is always big,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, referring to the U.S. jobs data.

“What we’d be concerned about is if we see a couple of prints below 100,000. Until then, we’re okay,” he added.

The dollar index last rose 0.1 percent, with the euro down 0.18 percent to $1.2045.

The Japanese yen weakened 0.35 percent at 113.17 per dollar, while Sterling was last trading at $1.3569, up 0.13 percent on the day.

U.S. Treasury yields rose on optimism over new tax cuts and the rise in monthly wage gains in the jobs report.

Benchmark 10-year notes last fell 7/32 in price to yield 2.4781 percent, from 2.453 percent late on Thursday.

The 30-year bond last fell 20/32 in price to yield 2.816 percent, from 2.786 percent late on Thursday.

Oil prices fell with U.S. production soaring. Earlier in the week, prices climbed to highs last seen in 2015, boosted by tightening supply and political tensions in OPEC member Iran.

U.S. crude fell 0.82 percent to $61.50 per barrel and Brent was last at $67.69, down 0.56 percent on the day.

In commodities, zinc hit its highest in more than a decade as concerns over market tightness continued. Three-month zinc on the London Metal Exchange was last bid at $3,352.

Additional reporting by Maytaal Angel, Kit Rees Julien Ponthus and Dmitry Zhdannikov in London, Gertrude Chavez-Dreyfuss and Kate Duguid in New York, Sruthi Shankar in Bengaluru, Henning Gloystein in Singapore; Editing by Alison Williams and Nick Zieminski

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