Volkswacht Bodensee - Stock markets waver as US hiring cools

The government figures had been eagerly awaited by investors as a gauge whether the Fed will need to raise interest rates once or twice again this year in order to bring down inflation.

The world's biggest economy added 209,000 jobs last month, down from a revised figure of 306,000 in May. The employment figure was below the median expectation of 240,000 new jobs in a survey of economists conducted by MarketWatch.

Briefing.com analyst Patrick O'Hare said what the "report won't change is the Fed's view that additional tightening action is likely going to be appropriate".

While the data fits the narrative of a soft landing of the US economy from the impact of interest rate hikes, the Fed will unlikely be reassured by growth in average hourly earnings accelerating.

Data Thursday showed US private firms created twice as many jobs as expected in June, while the crucial services sector saw solid growth.

O'Hare said the market is expecting an interest rate hike in July, but so far see less than 50 percent chances of hikes in September, November and December meetings of Fed policymakers.

With higher interest rates unfavourable for the bottom line of firms, stocks often get a boost from data that reduces the chances of the Fed hiking them.

Wall Street's major indices opened lower, however, though the tech-heavy Nasdaq and S&P 500 flipped into positive territory as the morning trading session continued.

The dollar deepened losses against major rivals following the jobs data, while yields on US government bonds also fell.

"The US dollar had already been looking a little on the soft side leading into today's jobs numbers, so the slightly softer headline number, along with the slide in yields has helped to push it even lower to the lowest levels this month," said CMC Markets analyst Michael Hewson.

European markets closed mixed, with London finishing lower while Paris and Frankfurt rose.

Traders were also keeping tabs on China, where US Treasury Secretary Janet Yellen held talks with top policy officials in efforts to smoot strained ties between the economic superpowers.

Yellen told Chinese Premier Li Qiang that the United States was not seeking "winner-take-all" competition.

Li said that Beijing could see the relationship recovering after a difficult period.

Global equities have suffered some sharp losses this week in a weak start to the second half of 2023.

"There is mounting anxiety about the resilience of the economy and what that will mean for interest rates going into the end of this year and 2024," noted Craig Erlam, senior market analyst at OANDA trading group.

- Key figures around 1530 GMT -

New York - Dow: DOWN 0.1 percent at 33,876.92 points

London - FTSE 100: DOWN 0.3 percent at 7,256.94 (close)

Frankfurt - DAX: UP 0.5 percent at 15,603.40 (close)

Paris - CAC 40: UP 0.4 percent at 7,111.88 (close)

EURO STOXX 50: UP 0.3 percent at 4,236.60 (close)

Tokyo - Nikkei 225: DOWN 1.2 percent at 32,288.42 (close)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 18,365.70 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,196.61 (close)

Euro/dollar: UP at $1.0952 from $1.0891 on Thursday

Pound/dollar: UP at $1.2836 from $1.2738

Dollar/yen: DOWN at 142.24 yen from 144.10 yen

Euro/pound: DOWN at 85.32 pence from 85.48 pence

Brent North Sea crude: UP 1.4 percent at $77.59 per barrel

West Texas Intermediate: UP 1.5 percent at $72.84 per barrel

burs-rl/lth

F.Pavlenko--BTB