Global stocks up after U.S. job gain paves way for rate hike

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Global stocks gained Monday after strong U.S. jobs data cleared the way for more interest rate hikes and Chinese exports rose by double digits.

Wall Street's benchmark S&P 500 lost 0.2% on Friday after government data showed American employers added more jobs than expected in June. That undercut expectations a slowing economy might prompt the Fed to postpone or scale back plans for more rate hikes to cool inflation.

On Wall Street, the future for the S&P 500 rose 0.3% while that for the Dow Jones Industrial Average was up 0.2%. China's trade surplus swelled to US$101 billion in July after imports rose just 2.3% over a year ago, reflecting weak domestic demand. India's Sensex gained 0.9% at 58,892.25. Taiwan, New Zealand, Singapore and Bangkok retreated while Jakarta gained.

Last week's strong U.S. employment data gave ammunition to Fed officials who say the economy can tolerate higher borrowing costs to cool inflation. After Friday's announcement, traders expect the Fed to raise its benchmark rate by 0.75 percentage points next month, up from forecasts of half a point. That would be triple the usual margin and the third such outsized hike this year.

 

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