Oil Prices Drop as Global Shares Rise Amid Weaker US Jobs Data
Global shares rose yesterday as oil prices dropped, while weaker-than-forecast US jobs data reduced the chances of a Federal Reserve rate hike later this month.
The Labour Department's employment report showed that non-farm payrolls increased by 29,000 jobs in September after a downwardly revised 133,000 rise in August. Economists polled by Reuters had forecast payrolls advancing 90,000.
As a result of the data, bets on a second rate hike from the Federal Reserve this month faded, with markets now assigning a 15 per cent chance of a hike in October compared to around 25 per cent before the data. Two top policymakers said they wanted more data before deciding what to do next with interest rates.
George Brown, Schroders senior economist, stated that the figures may ease some concerns that previous interest rate cuts from the Fed could stoke inflation problems, but added, 'The bigger question is whether rates ultimately need to be taken into genuinely restrictive territory to bring inflation back under control.'