Europe's financial markets respond to better job news from US
Friday, September 3, 2010 at 1:13PM European stocks soar on US data; dollar breaches 85 yen
LONDON (AFP) – European equities surged on Friday and the dollar jumped above 85 yen as financial markets welcomed a better-than-expected payrolls report in the United States.
The Frankfurt stock market leapt 1.17 percent, London bounced 1.13 percent higher and Paris added a hefty 1.72 percent after the upbeat news, which boosted investor appetite for risk.
In foreign exchange trade, the dollar rose to 85.17 yen from 84.30 yen in New York late on Thursday. The US unit meanwhile wobbled against the euro before pulling level.
And in opening trade, Wall Street's Dow Jones Industrial Average rallied by 0.90 percent as US investors also cheered the data.
In an eagerly-awaited unemployment report, the US government's Labor Department revealed on Friday that the American economy lost 54,000 jobs in August.
That was far better than market expectations for a larger loss of 120,000 jobs for last month.
The figures, which are seen as a crucial litmus test for the sputtering economic recovery and President Barack Obama's policies, spurred European stock markets higher in afternoon deals.
The US unemployment rate meanwhile edged up to 9.6 percent in August, from 9.5 percent in July, showing the recovering economy was still struggling to create jobs.
"It is 'risk-on Friday' for the markets following the much better than expected non-farm payrolls numbers," said Rajesh Patel, analyst at trading firm Spread Co. in London.
"From an almost comatose morning, traders sprung to life, sending indices shooting upwards.
"Those that were expecting a bearish jobs numbers got their fingers burnt," he added.
"It has been a tremendous start to September for indices, with the Dow Jones and the FTSE 100 already up over 4.0 percent as the bulls make hay while the sun shines."
However, VTB Capital economist Neil MacKinnon sounded a note of caution over the better-than-expected data.
"Although the US jobs report did not turn out to be a shocker, nevertheless the picture is one of a labour market still in recession," he warned.
From Yahoo News
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