* U.S. jobs market surprisingly weak in December
* U.S. Treasury bond yields fall, 10-yr note yield falls
below 2.90 pct
* Chinese exports miss forecasts, but imports up strongly
* Gold heads for flat week after best run since October
By David Gaffen and Marc Jones
NEW YORK/LONDON, Jan 10 U.S. bond prices jumped
and global equity markets pared gains on Friday, after a
surprisingly weak month for jobs growth in the United States
that was somewhat affected by bad weather.
U.S. nonfarm payrolls rose just 74,000 in December, the
smallest increase in nearly three years and far below the
196,000 forecast by economists. The unemployment rate fell 0.3
percentage point to 6.7 percent but this in part reflected
people leaving the labor force.
U.S. stocks opened slightly higher, though equity futures
initially had been knocked down by the jobs numbers. The Dow
Jones industrial average rose 19.2 points or 0.12
percent, to 16,463.96, the S&P 500 gained 2.67 points or
0.15 percent, to 1,840.8 and the Nasdaq Composite added
12.395 points or 0.3 percent, to 4,168.589.
Treasury bond yields fell, with the 10-year benchmark note
yield dipping below 2.90 percent.
The immediate question that the lackluster report raised for
financial markets was whether this would alter the Federal
Reserve's plans to slowly reduce monthly stimulus. However,
investors suggested weather-related effects on the employment
numbers complicate that picture.
"The longer-term view is that the economy is still
improving, which is why we're not seeing a big decline in stock
futures, though yields are plummeting. That will be good for
equities," said Wayne Kaufman, chief market analyst at Rockwell
Securities in New York.
November's payrolls figures were revised higher, and the
possibility that weather affected the report had some investors
thinking the December numbers will be revised as well.
"You have a bunch of traders sitting there looking at a
number they don't know anything about, they see a weak number
and they hit 'sell' and when people take a look through it
again, they will reconsider," said John Canally, investment
strategist and economist for LPL Financial in Boston.
The dollar gave up gains following the jobs report, with the
euro up 0.15 percent to $1.3627, and the dollar was down against
the yen at 104.64.
Gold, which last week saw its best week since October,
drifted around $1,240 an ounce, while copper,
facing a second successive weekly fall, rose 1.1 percent to
$7,296.00 a tonne.
Crude futures bounced to $92.67 a barrel after
hitting an eight-month trough at $91.24 overnight. Brent crude
edged up 45 cents to $106.84 per barrel.
Asian markets had remained soggy overnight after Chinese
trade data proved to be a mixed bag. While China's exports grew
a little less than expected at 4.3 percent in December from a
year earlier, imports easily outpaced forecasts with an increase
of 8.3 percent.
The jump in imports could point to stronger domestic demand
and a rebalancing away from a reliance on exports to fuel
growth, a sea change long desired by policymakers everywhere.
"This indicates that domestic demand is not as soft as had
been feared, and the Chinese economy - while decelerating - is
unlikely to see a sharp slowdown," said Dariusz Kowalczyk, an
economist at Credit Agricole CIB in Hong Kong.
ECB PARTS WAYS WITH FED
In contrast to the Fed, the European Central Bank keeps
holding out the prospect of yet more stimulus in the euro zone.
On Thursday, ECB President Mario Draghi underlined his
determination to act should deflation become a real risk or
rising money rates threaten a fragile recovery.
Renewed upward pressure on the latter was avoided on Friday
as despite an enforced year-end break, euro zone banks posted
back just 2.6 billion euros of their ultra-cheap ECB LTRO loans,
versus 20 billion last time around.
"The ECB's monthly press conference was very dovish in light
of the current weakness in euro area inflation," said Dylan
Eades, an economist at Australia and New Zealand Bank.
"Draghi left the market in no doubt that the ECB will act
again if necessary."
Meanwhile, Euro zone periphery shares sustained their
blistering rally on Friday.
Spanish stocks jumped another 0.9 percent to leave
them up over 5.3 percent and on course for their strongest week
since last March, while a 0.6 percent rise for Portuguese stocks
took their 2014 gains to 8.4 percent.
All three countries' bonds have also enjoyed hefty rallies
this week and though there was some small-scale profit taking on
Friday, they have retained big gains.