Weak US Jobs Data Reduces Fed Rate Hike Bets

Global stock markets rallied on Monday after the release of US jobs data showed a weaker-than-expected labor market, leading investors to bet that the Federal Reserve may keep interest rates unchanged in September.

The Bureau of Labor Statistics reported that employers cut 23,000 jobs in July, while revising down job growth for May and June. This raised concerns about a slowdown in the US economy but also gave investors hope that the Fed might not raise borrowing costs as expected.

Markets now put the chance of a September rate hike at around 43%, down from 64% a week earlier, according to Bloomberg.

National Australia Bank strategist Rodrigo Catril said the jobs report was a major challenge to expectations of a near-term Fed rate increase, but noted that inflation remained a key concern for the central bank.