# World shares rise, U.S. yield curve inverts after strong jobs data
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-04-01
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Global Shares Bounce as Oil Falls with Rising Bond Yields
Meta Description: Shares, bond yields, and oil prices react to strong U.S. jobs data, inflation, and expectations of Fed rate hikes in response to economic growth and rising
URL: https://financedigest.com/world-shares-rise-u-s-yield-curve-inverts-after-strong-jobs-datahtml

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By Carolyn Cohn

LONDON (Reuters) – World shares bounced and government bond yields resumed their upward climb on Friday on signs of persistent prices pressures, while oil was poised for a 13% weekly fall following reserve releases.

U.S. [data released early Friday showed employers added 431,000 jobs](https://www.financedigest.com/stocks-mixed-dollar-gains-after-robust-inflation-jobs-data.html "Stocks mixed, dollar gains after robust inflation, jobs data") in March and the unemployment rate fell to 3.6%, continuing a strong run of hiring that has left key aspects of the U.S. [labor market](https://www.financedigest.com/u-s-job-growth-surges-in-july-as-labor-market-defies-recession-fears.html "U.S. job growth surges in July as labor market defies recession fears") “little different” from where they were before the pandemic.

With U.S. economic growth so robust and inflation running at three times the Federal Reserve’s 2% target, [investors are widely expecting](https://www.financedigest.com/wave-of-lawsuits-over-ftx-expected-but-investors-will-face-legal-hurdles.html "‘Wave’ of lawsuits over FTX expected, but investors will face legal hurdles") a drum roll of interest rate rises this year.

[Treasury yields](https://www.financedigest.com/wall-st-flutters-treasury-yields-ease-as-powell-resumes-testimony.html "Wall St flutters, Treasury yields ease as Powell resumes testimony"), which retreated earlier this week as portfolio adjustments boosted demand for bonds, spiked again on Friday, causing a closely watched part of the yield curve to invert for the third time this week.

An inversion of the yield curve, when shorter-dated [yields rise](https://www.financedigest.com/global-equities-gain-as-rising-bond-yields-pressure-gold.html "Global equities gain, as rising bond yields pressure gold") above longer-dated ones, are seen as a harbinger of a recession in the next one or two years.

Today’s solid growth of payrolls checked the box for the Fed in its drive toward fighting inflation,” said Rick Rieder, BlackRock’s Chief Investment [Officer of Global](https://www.financedigest.com/black-panther-sequel-ignites-box-office-with-330-million-global-debut.html "‘Black Panther’ sequel ignites box office with 0 million global debut") Fixed Income.

Consequently, the Fed looks clearly undeterred in reaching at least policy neutrality and probably will do at least one, and maybe two 50-basis-point [rate hikes](https://www.financedigest.com/shares-fall-with-oil-prices-amid-concerns-about-u-s-fed-rate-hikes.html "Shares fall with oil prices amid concerns about U.S. Fed rate hikes") by the June … meeting, which could even include an inter-meeting hike.”

But bets that aggressive monetary tightening could be on the cards did not [drag equity markets lower](https://www.financedigest.com/cyclicals-bat-drag-ftse-100-lower-ahead-of-fed-decision.html "Cyclicals, BAT drag FTSE 100 lower ahead of Fed decision") on Friday.

By [late morning in New York](https://www.financedigest.com/stellantis-unveils-ram-ev-pickup-to-debut-late-in-2024-at-new-york-auto-show.html "Stellantis unveils Ram EV pickup, to debut late in 2024, at New York auto show"), the Dow Jones Industrial Average was little changed, the S&P 500 rose 0.11%, and the Nasdaq Composite added 0.28%.

The pan-European STOXX 600 index rose 0.62% and MSCI’s gauge of [stocks across the globe gained](https://www.financedigest.com/stocks-dollar-gain-on-resilient-u-s-economy.html "Stocks, dollar gain on resilient U.S. economy") 0.05%.

Inflation in Europe is also running at record levels, with [Euro zone inflation](https://www.financedigest.com/dollar-trims-gains-vs-euro-after-u-s-inflation-data.html "Dollar trims gains vs euro after U.S. inflation data") hitting 7.5% in March, data showed on Friday, another all-time high with months left before it is set to peak, raising pressure on the European Central Bank to act to contain prices even as growth slows sharply.

In response, the German 10-year government bond yield, a benchmark for the euro zone, rose 2.8 bps to 0.58%, after jumping 39 bps in March, its [biggest monthly rise since](https://www.financedigest.com/uk-firms-plan-biggest-pay-rises-since-2012-to-fill-staff-gaps.html "UK firms plan biggest pay rises since 2012 to fill staff gaps") 2009\. \[GVD/EUR\]

Government bond yields have moved up markedly in recent weeks and can be expected to trend higher over time due to inflationary pressures that are here to stay and responses by the main central banks,” said Christian Nolting, [Global Chief Investment Officer at Deutsche Bank](https://www.financedigest.com/global-shares-jump-but-bank-whack-a-mole-not-over.html "Global shares jump but bank ‘whack-a-mole’ not over") Private Bank in a note.

Two-year [Treasury yields](https://www.financedigest.com/wall-st-indexes-mixed-treasury-yields-tick-up-as-higher-rates-loom.html "Wall St indexes mixed, Treasury yields tick up as higher rates loom") jumped to 2.4523% from 2.284%, surpassing benchmark 10-year U.S. [Treasury yields](https://www.financedigest.com/stocks-fall-treasury-yields-rise-upon-final-2022-trading-day.html "Stocks fall, Treasury yields rise upon final 2022 trading day"), which also rose to 2.3932% from 2.325%. \[US/\]

In Tokyo, the Nikkei was down 0.56%, notching up a 1.7% [weekly fall](https://www.financedigest.com/oil-prices-set-for-weekly-fall-on-stockpile-releases.html "Oil prices set for weekly fall on stockpile releases").

Supply disruption and surging raw material costs drove Japanese business confidence to a [nine-month low](https://www.financedigest.com/dollar-falls-to-nine-month-low-as-powell-notes-progress-in-disinflation.html "Dollar falls to nine-month low as Powell notes progress in disinflation") last quarter.

Chinese blue chips rose 1.27%, helped by [hopes for policy easing](https://www.financedigest.com/stocks-bonds-extend-rally-on-hopes-rate-hikes-ease.html "Stocks, bonds extend rally on hopes rate hikes ease"). \[.HK\]

Oil dipped in and out of negative territory ahead of a meeting of International Energy Agency member [nations set to discuss a release](https://www.financedigest.com/national-cinemedia-releases-first-cinema-attention-measurement-study-conducted-by-lumen-in-collaboration-with-dentsu.html "National CineMedia releases first cinema attention measurement study, conducted by Lumen in collaboration with dentsu") of emergency oil reserves alongside a huge planned release by the United States.

[Oil is on course for a 12%-13% weekly fall](https://www.financedigest.com/oil-falls-as-earthquake-impact-on-crude-eases-rate-hike-fears-rise.html "Oil falls as earthquake impact on crude eases, rate hike fears rise") – the sharpest in almost two years, after an earlier surge driven by the Ukraine conflict had seen prices rise by more than 30%. \[O/R\]

U.S. crude rose 0.23% to $100.51 per barrel and Brent was at $105.64, up 0.89% on the day.

The dollar has benefited from safe-haven flows and [expectations of rising](https://www.financedigest.com/german-industrial-orders-rise-more-than-expected-in-february.html "German industrial orders rise more than expected in February") U.S. rates. Against a basket of peers, the greenback was up 0.34% at 98.647, and it was up 0.87% against the yen at 122.81. \[FRX/\]

The euro was down slightly at $1.1040.

Safe-haven gold fell 0.59% after its [biggest quarterly gain in two years](https://www.financedigest.com/uk-nurses-begin-biggest-strike-ballot-in-more-than-100-years.html "UK nurses begin biggest strike ballot in more than 100 years"). Spot gold was last quoted at $1,928.01 per ounce. \[GOL/\]

(Additional reporting by Andrew Galbraith in Shanghai, Tom Westbrook in Singapore and Saikat Chatterjee in London; Editing by Simon Cameron-Moore, Catherine Evans, Barbara Lewis and Nick Macfie)


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