Morning Note: A Round-up of Global Financial Market News.

Market News

A stronger-than-anticipated increase in US jobs drove stocks and short-dated bonds lower, with traders boosting their bets that the Federal Reserve will raise rates this month. The US added 162k jobs in August, far exceeding market expectations of 56k. The unemployment rate held steady at 4.1%, as did the rate of growth of average earnings at 3.1%. Further clues of the Fed’s decision may be provided by this week’s inflation data. In the meantime, the yield on the 10-year US Treasury is 4.78% and gold has drifted down to $4,400 an ounce.

The price of Brent crude climbed to $97 a barrel after the US and Iran exchanged attacks involving tankers in the Strait of Hormuz. Tehran said it would declare a restricted zone outside the strait. US Energy Secretary Chris Wright signalled there would be no letup in American presence in Hormuz.

In Asia this morning, technology shares led gains: Nikkei 225 (+2.1%); Shanghai Composite (+0.1%); Kospi (+4.6%). One reason cited for the gains was optimism that a new model from OpenAI would boost demand for AI computing power. China is injecting $45bn into eight major banks and insurers to strengthen its financial system. The finance ministry will issue special bonds to fund the recapitalisation.

The US market is closed for a holiday today. The FTSE 100 is currently little changed at 10,826, while Sterling trades at $1.3524 and €1.1645.  

In Germany, a far-right party posted its strongest-ever showing, injecting fresh political uncertainty into Europe's core economy. The AfD secured about 44% of the vote in the Saxony-Anhalt state election.

Source: Bloomberg