LONDON — Weak U.S. jobs figures shored up stock markets Tuesday but weighed on the dollar, which fell to its lowest level against the euro this year, as investors concluded that the Federal Reserve would not be reducing its monetary stimulus this year.
The Labor Department reported that 148,000 jobs were created in September, below the consensus in the markets for around 180,000. Following revisions to back data, it means that the U.S. economy added an average of 143,000 jobs a month from July through September, down from 182,000 from April through June.
Though the unemployment rate, which is based on a separate survey, fell to 7.2 percent from 7.3 percent, the labor market report suggests the U.S. economy was slowing even before the U.S. government was partially shut down. The September figures were delayed from their traditional release time of the first Friday of the month because of the shutdown.
Following the figures, already solid stock markets turned even higher while the dollar's weakness was sustained as investors think it's now unlikely that the Fed will start reducing its $85 billion worth of monthly asset purchases this year. Until the budget stalemate in Washington, many investors had thought the Fed would already be "tapering" the stimulus.
"With the budget dispute more than likely trimming fourth-quarter growth, Federal Reserve policymakers are expected to wait until March to begin reducing stimulus," said Max Cohen, a trader at Spreadex. "Especially now considering the weak non-farm data."
In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 6,688 while Germany's DAX rose 0.7 percent to 8,927. The CAC-40 in France was 0.6 percent higher at 4,301.
Wall Street was poised for a solid opening, with both Dow futures and the broader S&P 500 futures up 0.3 percent.
The dollar was under pressure on the prospect of a longer period of stimulus, which effectively leads to the creation of more dollars. The dollar was down 0.1 percent at 98.06 while the euro was 0.4 percent higher at $1.3727. Europe's single currency earlier hit $1.3748, its highest level this year.
As well as monitoring the U.S. data flow, investors have a raft of U.S. earnings statements to digest this week. Around 30 percent of the companies listed on the S&P are due to release third-quarter numbers this week.
Earlier in Asia, the mood was subdued, too. Japan's Nikkei 225 stock average closed up 0.1 percent at 14,713.25 and Australia's S&P/ASX 200 added 0.4 percent to 5,373.10. Seoul's Kospi gained 0.2 percent to 2,056.12. Hong Kong's Hang Seng shed 0.5 percent to 23,315.99 and China's Shanghai Composite Index was off 0.8 percent at 2,210.65.
In the oil markets, a barrel of benchmark New York crude was down 32 cents at $99.37. Oil closed below $100 a barrel Monday for the first time since early July as U.S. supplies keep rising and the risks of disruption to Middle East shipments subside.