Oil traded near a one-month high yesterday after the US missile strike on a Syrian air base while the dollar rose as investors dismissed a weak US jobs report as not enough to derail a strong economy or outlook for rising interest rates.
The toughest US action in Syria’s six-year-old civil war raised geopolitical uncertainty in the Middle East and initially hit assets such as equities and oil.
Gold, a safe-haven asset, climbed to a five-month high and benchmark US Treasury yields briefly slid to four-month lows.
US crude rose 51 cents to $52.21 a barrel and Brent was last up 39 cents to $55.28. Spot gold added 1.2 per cent to $1,265.70 an ounce.
Investors still expect the Federal Reserve to raise interest rates twice more in 2017 as the unemployment rate in the jobs report declined to 4.5 per cent from 4.7 per cent in February.
“As long as we see the unemployment rate decline, we will see more rate hikes,” said Cathy Barrera, chief economic adviser at ZipRecuiter in New York.
News of the US cruise missile strikes on the Syrian air base at first sent global stocks lower, but most losses were pared after US officials described the attack as a one-off event that would not lead to wider escalation.
Stock market indexes rebounded to close higher in Europe and traded flat on Wall Street where a dismal US jobs reports gave investors a reason to pause.
Nonfarm payrolls increased by 98,000 jobs last month, the fewest since last May, the Labor Department said. A major snow storm dubbed Stella in the Northeast during the week in March of the employment survey led to a step-down in hiring.
“Our thinking is that there is nothing wrong with the labour market, other than the timing of Stella,” said Phil Orlando, chief equity strategist at Federated Investors in New York.
US corporate profits for the first quarter will be up nine per cent to 10 per cent from a year earlier, and give the market a lift when earnings season begins next week, he said.
The Dow Jones Industrial Average fell 1.06 points, or 0.01 per cent, to 20,661.89. The S&P 500 lost 0.89 points, or 0.04 per cent, to 2,356.6 and the Nasdaq Composite dropped 5.26 points, or 0.09 per cent, to 5,873.69.
The pan-European FTSEurofirst 300 index rose 0.11 per cent to close at a provisional 1,501.61, while MSCI’s gauge of stocks across the globe shed 0.06 per cent.
The drop in the unemployment rate suggested the labour market was still tightening and does not change the outlook for bonds.
US 10- and seven-year yields briefly hit 2.269 per cent and 2.072 per cent, respectively, their lowest since November 18, 2016. US 30-year yields touched 2.939 per cent, their lowest since mid-January.