World stocks surged to a two-week high yesterday after strong US jobs data at the end of last week helped take the edge off investors’ concerns about the potential outbreak of trade war between the United States and other major economies.

European shares shot up across the board, following their Asian counterparts, while emerging market currencies strengthened as investors bought up so-called riskier assets and sold “safe haven” securities such as gold and government bonds.

Markets have been cheering Friday’s US nonfarm payrolls data which showed a hefty 313,000 rise in jobs, but also revealed that annual growth in average hourly earnings had slowed to 2.6 per cent after spiking in January.

This suggested that the world’s largest economy is experiencing a high growth without a corresponding spike in inflation.

This is referred to in the market as a “Goldilocks” trend; giving investors an incentive to buy assets such as equities and high-yield bonds without having to fear tighter central bank policy.

As a result, the S&P500 surged more than 1.7 per cent on Friday – its second-best day of the year so far – and futures pricing pointed to another day of gains yesterday.

The warm glow extended around the globe, with Asian and European shares gaining.

Inflation data from the world’s largest economy is due today, and the question is how signs of economic strength may affect the US Federal Reserve’s pace of monetary tightening.

Meanwhile, Brent crude gave up some of Friday’s gains, dropping 35 cents to $65.14 a barrel, as rising U.S. output loomed over markets despite a slowdown in rig drilling activity.

Gold prices also slipped half a percent to $1,315.81 an ounce, as demand for safe haven investments fell.