U.S. stock futures extended gains and government bond yields declined Friday after Labor Department data showed U.S. hiring picked up more than expected in June.
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S&P 500 futures rose 0.2% shortly after the report, which is a key data point for the Federal Reserve. Prior to the report, S&P 500 futures were up 0.1%.
Recently, Fed officials have suggested there is a good chance they will announce a decision in the next few months to start shrinking the bank's large portfolio of bonds and other assets.
Nonfarm payrolls rose by a seasonally adjusted 222,000 from the prior month and the unemployment rate ticked up to 4.4% from 4.3%, the Labor Department said Friday. Economists surveyed by The Wall Street Journal had expected 174,000 new jobs and the unemployment rate to be 4.3%.
Average hourly earnings for private-sector workers rose 2.5% in June compared with a year earlier, but was little changed from prior months.
Ahead of the report, some analysts said if the unemployment rate held or fell that would suggest the labor market is tightening and reinforce the Fed's plans to raise short-term rates a third time this year. Instead it rose slightly.
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The yield on the 10-year Treasury note fell to 2.377% from 2.389% ahead of the report, though it remained up from 2.369% on Thursday.
The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, pared some gains following the jobs report, recently up 0.1% after earlier rising 0.2% in early trading Friday.
In Europe, the Stoxx Europe 600 edged down 0.2%, dragged down by energy shares as oil prices dropped. That followed losses in bourses across Asia.
Hawkish signals from policy makers in Europe and the U.S. have roiled markets in recent days as investors gauge how fast central banks will be moving away from their ultra-accommodative monetary policies put in place after the financial crisis. Minutes from the European Central Bank's last meeting released Thursday showed officials are considering dropping a pledge to accelerate bond purchases.
"People are taking note of what signals central banks are sending," said Lefteris Farmakis, macro strategist at UBS. "If central banks rush the tightening, markets will suffer a lot."
In Asian stock markets, Japan's Nikkei Stock Average fell 0.3%, while Hong Kong's Hang Seng Index was down 0.5%.
In commodities, Brent oil prices were down 2.4% at $46.94 a barrel, extending overnight declines after data on Thursday showed that U.S. oil production last week rebounded strongly. Gold was down 0.2%.
--Corrie Driebusch contributed to this article.
Write to Georgi Kantchev at firstname.lastname@example.org
(END) Dow Jones Newswires
July 07, 2017 09:01 ET (13:01 GMT)