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Global Markets React as US Job Growth Slows, Dollar Weakens

Global stock indices rose significantly, while the US dollar fell to a six-week low on Friday.

Global stock indexes experienced a notable surge, while the US dollar reached a six-week low on Friday in response to data indicating a significant slowdown in US job growth for October.

Benchmark 10-year US Treasury yields dropped to five-week lows as the job growth slowdown reinforced expectations that the Federal Reserve might halt interest rate hikes.

US Two-Year Yields at Early September Levels:

US two-year yields fell to levels not seen since early September following the release of the employment data. 

The report revealed that job growth slowed, partly due to strikes by the United Auto Workers union against major car manufacturers, impacting manufacturing payrolls.

The data also highlighted the smallest increase in annual wages in nearly 2-1/2 years, suggesting a softening of labor market conditions.

Market Reaction to Fed’s Likely Stance:

Experts believe that the job growth slowdown will likely keep the Federal Reserve from further raising interest rates. 

Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, noted that this development eases concerns about an overheated economy, a key consideration for the Fed.

Indications of Central Banks’ Stances:

Recent decisions by central banks, including the US Federal Reserve and the Bank of England, have left rates unchanged. 

These moves, along with comments by Fed Chair Jerome Powell, suggest to some investors that central banks may have concluded their rate-raising cycle. 

However, central bank officials emphasize that there may still be measures to address inflation concerns.

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