Global equity prices edged lower yesterday after December’s US non-farm payrolls report showed a slowing in hiring but an increase in wages, setting the economy

up for further interest rate increases from the Federal Reserve this year.

The jobs report sent the dollar to session highs against several major currencies, and US Treasury debt yields rallied from

multi-week lows.

US employment increased less than expected in December but a rebound in wages pointed to sustained labour market momentum that sets up the economy for stronger growth and could drive the Fed to consider raising interest rates as early as the first quarter.

“There’s still improvement to be made, especially with the labour force participation rate being low, but conditions seem to be close to what the Fed might be happy with,” said Brian Jacobsen, chief portfolio strategist, at Wells Fargo Funds Management, in Menomonee Falls, Wisconsin.

MSCI’s world index, which tracks shares in 46 countries, snapped a three-day gaining streak to dip 0.17 per cent.

The index found some support on Wall Street as the S&P 500 treaded water in choppy trading and the Nasdaq inched towards a record high.

The Dow Jones Industrial Average fell 6.7 points, or 0.03 per cent, to 19,892.59, the S&P 500 gained 0.54 points, or 0.02 per cent, to 2,269.54 and the Nasdaq Composite added 17.81 points, or 0.32 per cent, to 5,505.75.

European shares rallied from lows yesterday after the US jobs data. Europe’s broad FTSEurofirst 300 index was down 0.18 per cent at 1,442.98.

The dollar recovered ground after two straight days of losses against a basket of major currencies. The dollar index, which measures the greenback against six major rivals, was up 0.25 per cent to 101.77.

In bond markets, US Treasury debt yields rose across the board. Yields on benchmark US 10-year notes rose from a five-week trough, while those on 30-year bonds recovered from a seven-week low following the jobs data.

“The wage pressure number will give the Fed enough ammunition to consider raising rates again perhaps in the first quarter,” said Dan Heckman, senior fixed income strategist, at US Bank Wealth Management in Kansas City, Missouri.

The US 10-year note was down 11/32 in price to yield 2.407 per cent, compared with 2.368 per cent late on Thursday. The stronger dollar weighed on dollar-denominated commodity prices.

Gold slipped from a one-month high touched in the previous

session. Spot gold fell 0.27 per cent to $1,177.26 an ounce.

Oil prices were dragged down by concerns that not all Opec producers will cut output in line with an agreement reached in November.

Brent crude was down 0.19 per cent at $56.7 a barrel, while US crude was down 0.09 per cent at $53.71.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.