Markets Rally on Strong Jobs Data

World stock markets rallied on Monday and the U.S. dollar hit a two-month high against the yen as the latest U.S. jobs data gave investors greater confidence in the strength of the economy.

Focus was already turning to Federal Reserve chief Janet Yellen’s semi-annual testimony on monetary policy and a meeting of Canada’s central bank on Wednesday for the latest policy signals from the world’s major central banks.

For now, unease about an end to an era of ultra-cheap money gave way to optimism about the global growth outlook, with Friday’s stronger-than-expected U.S. non-farm payrolls report helping to bolster risk appetite. Data on Monday showed exports from Germany, Europe’s biggest economy, rose more strongly than expected in May.

Over the past two weeks, markets have reassessed the outlook for tighter monetary policies from major central banks following a string of hawkish remarks.

“We’ll see just how much substance there is to these comments on Wednesday, when the Bank of Canada announces its latest decision, with investors now expecting a 25 basis point increase,” said Craig Erlam, senior market analyst at OANDA.

A rate rise from Canada’s central would be its first interest rate rise in nearly seven years.

CNBC

Central Banks Remain the Focus This Week

Week Ahead Dollar Rebounds on Strong Jobs Report

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.