NEW YORK — The US dollar rose against the yen and euro on Monday and US stocks hovered near last week’s record highs as a brighter outlook for the US economy kept the risk trade alive.
The euro extended its losses against the dollar to hit a session low in mid-morning trade after European Central Bank (ECB) President Mario Draghi said the bank, which cut interest rates last week, is watching economic data and is ready to act again.
Many analysts have expected a pullback in US equities for weeks now, which Wall Street has largely avoided as traders use weakness as an opportunity to add to long positions.
Wall Street stocks traded slightly higher after the S&P 500 and Dow industrials hit record levels on Friday in the wake of a strong payrolls report.
"Everyone is settling in for the moment; we had a nice week last week and there are no real catalysts to move us significantly one way or the other today," said Mark Martiak, senior wealth strategist at Premier/First Allied Securities in New York.
US employment rose more than expected in April, with 165,000 jobs created, and hiring was much stronger than thought in the previous two months, the US government said on Friday.
The report eased concerns raised by other data that had pointed to the US economy losing steam.
In morning trading, the Dow Jones industrial average was up 1.38 points, or 0.01%, at 14,975.34. The Standard & Poor’s 500 Index was up 3.05 points, or 0.19%, at 1,617.47. The Nasdaq Composite Index was up 12.95 points, or 0.38%, at 3,391.58.
The eurozone’s blue chip Euro STOXX 50 index was down 0.5% after hitting a near-two year peak on Friday.
A 0.56 rise in MSCI’s broadest index of Asia-Pacific shares outside Japan left the MSCI world equity index little changed.
Purchasing managers indices on Monday showed business growth flagged in China and recession dragged on eurozone companies, adding to a report on Friday that US corporate growth slowed in April.
Brent crude oil futures hit their highest since April 11 after supply concerns followed Israeli air strikes on Syria on Friday and Sunday.
But crude pared gains on demand worries cemented on the weak data from China and the eurozone, though it later bounced back.
"The attack over the weekend of Israel on Syria, on the one hand, can lead to some increased geopolitical premium," said Olivier Jakob, oil analyst at Petromatrix in Switzerland.
"But the global PMIs are weak and that in itself is not really bullish for distillates because the economy is still not providing signs that a strong recovery is ahead. Global oil demand is driven by distillates."
Brent was last up 1% at $105.30 and US crude futures added 0.4% at $95.97 after ending Friday with gains of around 1.7%.
With Tokyo and London stock markets closed for holidays, trading volume was generally thin across markets.
The US dollar rose for a third straight session against the yen and looked set to make another run at the 100-yen level after last week’s surprisingly strong US jobs data rekindled optimism about the US economy.
The dollar rose 0.3% to ¥99,34, having earlier hit ¥99,45, its strongest since April 25, according to Reuters data.
The ECB cut its benchmark refinancing rate by 25 basis points to 0.5% last Thursday. The euro fell sharply after Mr Draghi, in a post-meeting press conference, said the bank is technically ready for negative deposit rates.
The single currency was recently down 0.3% at $1.3071.
US Treasuries prices slipped slightly on Monday as investors continued to digest Friday’s better-than-expected jobs report, which sent yields surging to their highest levels in three weeks.
US government bonds are expected to stay at the relatively higher yields as investors prepare for $72bn in new supply this week. Benchmark 10-year Treasuries yielded 1.755%, up from 1.74% on Friday and up from 1.62% before the jobs data was released.
Gold prices were little changed after two weeks of gains, on expectations last month’s price slide to the lowest in more than two years has run its course for now.
Spot gold was recently down 0.1% at $1,468.20.