One week of markets in one minute: FTSE climbs as US jobs miss curtails Fed rate rise talk

Markets surged on Friday after poor US jobs data dampened expectations that the US Federal Reserve will raise rates in the near term, with the FTSE 100 reaching a two-week high after climbing more than 2%.

The latest figures out of the US showed non-farm payrolls came in at 151,000 in August, well-short of the 180,000 expected by market participants.

In the current environment, bad news is being welcomed by investors because it prolongs extraordinary stimulus measures, and as such, the jobs print boosted markets both in the US and the UK.

The S&P 500 closed the week marginally higher, up from 2,169 last Friday to 2,179, with Friday’s gain of around 0.4% shortly after London closed helping keep it in the black for the week.

Meanwhile in the UK it was a similar story for the blue chip index. Having dropped for three days straight following the bank holiday, investors reacted very positively to the news from the US on Friday, the FTSE 100 climbing 148 points or 2.2%, to end the week at 6,894.6 points. This marked a two-week high for the index.

Further afield, stocks in Japan also picked up this week, rising 3.5% from 16,368 points to 16,925, while in Germany the DAX rose almost 1% on the week, closing up at 10,683 points.

Meanwhile in currency markets, the US jobs data weighed on the dollar, taking cable near to its highest level for a month. It touched an intraday high of $1.3352 against the dollar, and its highest level since August 3, before retreating to settle at $1.3294 later in the day.

In fixed income markets, gilt yields this week hit their highest level in nearly a month, closing at 0.727%, as the safe haven trade was impacted by a round of surprisingly positive economic data over recent weeks, including retail sales, GDP, unemployment and CPI inflation. Construction data followed suit today, although the big test is to come when the UK’s all-important services sector reports on Monday.

Elsewhere, gold was muted this week, trading around $1,320, while oil succumbed to another wave of profit-taking, tumbling back to under $47 having closed above $50 last week.

The Brexitometer

In the wake of the crisis, and in order to provide a quick and easy snapshot of the real impact of Brexit on markets, we will be updating the Brexitometer weekly, detailing the impact of the EU referendum result on UK markets.

FTSE 100: UP 8.8%

6,338 points at close on 23 June.

6,894 points at close on 2 September.

FTSE 250: UP 3.9%

17,334 points at close on 23 June.

18,016 points at close on 2 September.

FTSE All Share: UP 7.9%

3,481 points at close on 23 June.

3,756 points at close on 2 September.