Daily Times

Stock markets mostly fell on Friday after US government data showed employers added jobs at a better-than-expected pace last month, raising the prospect that the Federal Reserve will continue its aggressive monetary tightening.

Wall Street opened lower, while the Paris CAC 40 fell and Frankfurt was flat in afternoon deals. London’s FTSE 100 was closed for a holiday. Oil prices, meanwhile, steadied a day after the OPEC+ group of major oil producing nations led by Saudi Arabia and Russia agreed to raise output more than expected in the wake of a European Union ban on most Russian crude.

American employers added 390,000 jobs last month, a sign of a slowdown in hiring but still above forecasts amid a shortage of workers, official figures showed. The jobless rate held steady at 3.6pc for the third consecutive month, according to the US Labour Department. “This employment report was still too good overall to convince the market that the Federal Reserve is going to pause its rate hikes” after increasing them by 50 basis points at its policy meetings in June and July, said Briefing.com analyst Patrick O’Hare.

US indices had rallied on Thursday following a weaker-than-expected reading in a separate US private sector jobs report. The data from payroll firm ADP sparked hopes that the US central bank may be less aggressive than initially anticipated in tightening its monetary policy.

The Fed has hiked interest rates to combat decades-high inflation but investors worry that more aggressive moves could backfire and hamper economic growth. Friday’s non-farm payroll (NFP) figures could now reinforce the Fed’s resolve to tackle inflation. “The doves that were cheering the terrible ADP report yesterday are deserting the market after the strong NFP read today,” Swissquote bank analyst Ipek Ozkardeskaya told AFP.

Fed Vice Chair Lael Brainard warned on Thursday that she did not yet see any reason to take a breather in the third quarter. The European Central Bank has indicated it will raise its own rates in July for the first time in over a decade.

Tokyo’s stock market closed higher ahead of the latest US jobs report. Hong Kong and Chinese mainland indices were closed for holidays. Among major companies, Tesla shares fell more than 6pc after Reuters news agency reported that chief executive Elon Musk wanted to cut about 10pc of jobs at the electric car firm, citing an email in which he said he has a “super bad feeling” about the economy.

Elsewhere, Brent North Sea crude, the international benchmark, was slightly down at $116.66 per barrel. OPEC+ agreed on Thursday to ramp up output in July by 50pc more than in previous months. Oil prices initially rose, as the increase was not as high as investors had hoped, but they steadied on Friday.

“The most anticipated OPEC+ meeting of the year turned out to be a damp squib in the end,” said Jeffrey Halley, analyst at online trading platform OANDA. He noted that the increase of 638,000 barrels per day would be spread among OPEC+ members, including Russia and those that have struggled to meet quotas in previous months. “Given most of OPEC can’t even meet their present targets — with only Saudi Arabia, the UAE and possibly Iraq having any sort of spare capacity, and with Russia under sanctions — the entire exercise was nothing more than window dressing,” he said.