Global stock markets rise, US yields fall ahead of employment data

NEW YORK, June 2 (Reuters) – Global equity markets rose while US yields were lower on Thursday after lower-than-expected private payrolls data stirred hopes that the American economy was likely cooling and the Federal Reserve might be persuaded to modify its aggressive stance on interest rates and inflation.

Earlier on Thursday, the ADP National Employment Report showed that private payrolls rose by 128,000 jobs in May, which was much lower than the consensus estimate of 300,000 jobs and suggested that demand for labor was starting to slow. read more

If the private payrolls data is reaffirmed by the Labor Department’s more comprehensive jobs report on Friday, then the Fed would be unlikely to continue its pace of rate hikes, said Sandy Villere, portfolio manager at Villere & Co in New Orleans.

“Essentially, bad news is good news and good news is bad news. That means the economy is maybe cooling a little bit and the Fed can maybe calm down on their hikes because that is essentially controlling everything right now,” Villere said.

The MSCI world equity index (.MIWD00000PUS), which tracks shares in 50 countries, was up 1%. The pan-European STOXX 600 index gained 0.57%.

US Treasury yields fell ahead of the closely watched employment report and what it could indicate about the possible trajectory of interest rates.

Benchmark 10-year notes were down at 2.9259%, with two-year notes also down at 2.6479%.

On Wall Street, the S&P and the Dow reversed their earlier session losses and were trading higher, led by technology, consumer discretionary, communication services and financials.

The Dow Jones Industrial Average (.DJI) rose 0.55% to 32,994.83, the S&P 500 (.SPX) gained 1.12% to 4,146.98 and the Nasdaq Composite (.IXIC) added 2.02% to 12,236.61.

Oil prices edged higher after US crude inventories fell more than expected amid high demand for fuel and OPEC+ agreed to boost crude output to compensate for a drop in Russian production. read more

Brent futures rose 1.32% to $117.83 a barrel, while US West Texas Intermediate (WTI) crude rose 1.5% to $117.

The US dollar eased across the board, ceding some of the ground gained in recent sessions as firmer risk sentiment prompted investors to reach for higher-yielding currencies. read more

The dollar index fell 0.76%, with the euro up 0.91% to $1.0743.

Gold prices rose over 1%, supported by a dip in the dollar and the US private payrolls data. Spot gold rose 1.2% to $1,868.04 an ounce, while US gold futures gained 1.24% to $1,866.10 an ounce.

Reporting by Chibuike Oguh in New York; editing by Jonathan Oatis

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