European markets dived on Friday after data showed the slowest pace of US job growth in more than five years, dashing expectations that the US Federal Reserve could raise interest rates this month.
US nonfarm payrolls rose by just 38,000 last month, the smallest gain since September 2010 and far below an expected 164,000.
All 105 economists polled by Reuters had expected a higher number.
Wall Street’s top banks unanimously expect the Fed to leave rates unchanged when its policymakers meet this month in the wake of the US jobs report, results of a Reuters poll showed on Friday.
“This monthly report and the revisions to the past few months show that the labor market is not nearly as strong as many believed, so I think it takes June off the table,” said Chris Gaffney, president of EverBank World Markets in St Louis.
US shares pared losses, but still ended lower, while European stocks reversed gains.
Europe’s auto sector index ended 2.3 percent lower as the euro rallied against the US dollar.
MSCI’s all-country world equity index was last up 1.38 points, or 0.34 percent, at 403.87.
Europe’s broad FTSEurofirst 300 index closed 0.85 percent lower at 1,339.47 after gaining about 0.7 percent before the US data.
“The Fed rhetoric, which pushed hard to convince the market that they will move in the coming few meetings, just hit a wall,” said Marvin Loh, global markets strategist at BNY Mellon in Boston.
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
SPECULATION: The central bank cut the loan-to-value ratio for mortgages on second homes by 10 percent and denied grace periods to prevent a real-estate bubble The central bank’s board members in September agreed to tighten lending terms to induce a soft landing in the housing market, although some raised doubts that they would achieve the intended effect, the meeting’s minutes released yesterday showed. The central bank on Sept. 18 introduced harsher loan restrictions for mortgages across Taiwan in the hope of curbing housing speculation and hoarding that could create a bubble and threaten the financial system’s stability. Toward the aim, it cut the loan-to-value ratio by 10 percent for second and subsequent home mortgages and denied grace periods for first mortgages if applicants already owned other residential