World stocks mixed as US data ease inflation worries

Tokyo Global shares were mixed on Monday after a disappointing US jobs report signalled to investors that interest rates will likely stay low. France's CAC 40 dipped nearly 0.2 per cent to 6,374.45 in early trading, while Germany's DAX fell 0.2 per cent to 15,375.92.

Britain's FTSE 100 edged 0.1 per cent higher to 7,137.48. The future for the Dow industrials rose 0.2 per cent to 34,755.00 while the S&P 500 future was unchanged at 4,224.60. The US economy is regaining momentum as the rate of coronavirus vaccinations rises, but Friday's US jobs report was a massive disappointment.

The market's most anticipated economic data of each month, it showed employers added just 266,000 jobs in April, far fewer than the 975,000 jobs that economists were expecting. It was a steep drop from March's hiring pace of 770,000. The weak jobs number suggests the economy is still in recovery mode and bolsters the case for the Federal Reserve to keep interest rates low. The Fed has been holding short-term rates at a record low and buying $120 billion in bonds every month, helping drive the stock market's rebound from its pandemic low in March 2020. Investors have been fretting that a supercharged economy could spur higher, persistent inflation, forcing the US central bank to raise rates.

"Obviously this release blew market bets about Fed tapering and inflation out of the water," Michael Every of RaboResearch said in a commentary. "Indeed, there is now a stronger view that central banks can carry on pumping asset markets and commodity prices — and so headline CPI — in the hope this will magically generate wage inflation."