(Reuters) – The U.S. dollar rose against the yen and euro on Monday and U.S. stocks hovered near last week’s record highs as a brighter outlook for the U.S. 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 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 U.S. 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.
U.S. 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 U.S. government said on Friday. The report eased concerns raised by other data that had pointed to the U.S. economy losing steam.
In morning trading, the Dow Jones industrial average .DJI was up 1.38 points, or 0.01 percent, at 14,975.34. The Standard & Poor’s 500 Index .SPX was up 3.05 points, or 0.19 percent, at 1,617.47. The Nasdaq Composite Index .IXIC was up 12.95 points, or 0.38 percent, at 3,391.58.
The euro zone’s blue chip Euro STOXX 50 index .STOXX50E was down 0.5 percent after hitting a near-two year peak on Friday. .EU
A 0.56 rise in MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS left the MSCI world equity index .MIWD00000PUS little changed.
Purchasing managers indexes on Monday showed business growth flagged in China and recession dragged on euro zone companies, adding to a report on Friday that U.S. 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 euro zone, 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 percent at $105.30 and U.S. crude futures added 0.4 percent at $95.97 after ending Friday with gains of around 1.7 percent.
With Tokyo and London stock markets closed for holidays, trading volume was generally thin across markets.
DOLLAR STRENGTHENS
The U.S. 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 U.S. jobs data rekindled optimism about the U.S. economy.
The dollar rose 0.3 percent to 99.34 yen, having earlier hit 99.45 yen, its strongest since April 25, according to Reuters data.
The ECB cut its benchmark refinancing rate by 25 basis points to 0.5 percent last Thursday. The euro fell sharply after Draghi, in a post-meeting press conference, said that the bank is technically ready for negative deposit rates.
The single currency was recently down 0.3 percent at $1.3071.
U.S. 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.
U.S. government bonds are expected to stay at the relatively higher yields as investors prepare for $72 billion in new supply this week. Benchmark 10-year Treasuries yielded 1.755 percent, up from 1.74 percent on Friday and up from 1.62 percent 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 percent at $1,468.20.
(Additional reporting by Ryan Vlastelica, Wanfeng Zhou and Alex Lawler; Editing by Dan Grebler)