Global stocks head for best week since May after weak U.S. jobs data

Global equity markets were poised for their strongest weekly performance since early May on Friday, as softer-than-expected U.S. jobs data eased fears of an imminent Federal Reserve rate hike, sending relief through stock and commodity markets worldwide.

The MSCI All-Country World Index was up 1.7% for the week, buoyed by a combination of weak U.S. employment figures and encouraging manufacturing data from across Asia. The rally followed Thursday's June jobs report, which showed nonfarm payrolls rose by just 57,000 — well below the 110,000 economists had forecast — while prior months were revised down by a combined 74,000 jobs.reuters+2

Labor Market Offers Relief

The tepid report offered what Reuters called "relief for U.S. equities just as investors had begun to worry that excessive labor market strength might force the Federal Reserve to turn more hawkish in its fight against inflation". Traders pared expectations for a September rate hike, with the CME FedWatch Tool showing roughly a 54% probability, down from 66% before the data.reuters+2

"This jobs report lets anyone concerned about an imminent Fed hike breathe a sigh of relief," said Adam Sarhan, chief executive of 50 Park Investments.finance.yahoo

The unemployment rate dipped to 4.2% from 4.3%, though analysts noted this was driven largely by a shrinking labor force rather than robust hiring.usatoday+1

Asia Joins the Advance

Asian markets extended the rally on Friday after Purchasing Managers' Index data from China, Japan, Australia, and Singapore indicated solid expansion. South Korea's Kospi led regional gains, while Hong Kong's Hang Seng rose over 1%. European futures pointed higher in early trading, with German DAX futures up 0.5% and S&P 500 e-mini futures gaining 0.3%.money.usnews+2

U.S. markets were closed Friday for the Independence Day holiday.

Gold Snaps Losing Streak

Gold headed for its first weekly gain in five, rising more than 1% on Friday as the weaker dollar and reduced rate hike expectations drew buyers back to the metal. "What we're seeing is a reduction in the pricing of U.S. Federal Reserve rate hikes for the rest of this year," said Kelvin Wong, a senior market analyst at OANDA.cnbc+1

Silver, platinum, and palladium all advanced to over one-week highs and were on track for weekly gains.cnbc