Stocks soar after US jobs data quells inflation fears

Wall Street sparked a global rally in stocks on Friday after a crucial US jobs report showed wage growth slowed in December, fuelling investor bets that inflation is easing and that the Federal Reserve need not be as aggressive as some feared.

Still, some analysts warned such exuberance might be misplaced and that the data argued that policy tightening was far from over.“Everything else about this shows a very, very resilient labor market which doesn’t bode well for a smaller rate hike,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab in Austin, Texas.

The dollar index, which measures the greenback against six counterparts including the yen and euro, fell 1.1 per cent to 104.00, as investors tempered bets that the Fed might raise interest rates by 50 basis points at its February policy meeting.

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