Global equity markets climbed toward record-high levels on Thursday following stronger-than-expected U.S. employment data, while the U.S. dollar showed signs of weakness as traders reassessed interest rate expectations ahead of key inflation figures.
London South East The U.S. labour market unexpectedly added significantly more jobs in January 2026 than economists had projected.
This bolstered confidence in economic resilience and helped drive risk-asset appetite, lifting both U.S. and European stock indexes closer to historic peaks.
Equity Market Moves• Global stocks traded near record highs as investors absorbed the upbeat payroll figures. The MSCI All-World Index extended gains and was trading near its highest levels for the year.
Europe’s STOXX 600 advanced and reached all-time highs amid positive corporate earnings from major listed companies, including luxury and industrial firms.
Gains were broad-based despite volatility in sectors such as asset management and technology, which have faced recent pressure on valuation and earnings outlook.
London South EastLondon South EastLabour Market Strength and Its Implications• The U.S. economy added close to twice as many jobs as forecast in January, signalling strength in the labour market that eased concerns over a potential slowdown.
Robust job creation reduced the likelihood of immediate Federal Reserve interest rate cuts, driving higher Treasury yields on short-term maturities.
However, the dollar’s muted rally suggested that markets require further supporting data before committing to stronger currency positioning.
Analyst commentary highlighted that more positive macroeconomic signals may be needed to sustain a meaningful dollar recovery.
Foreign Exchange and Commodities• The U.S. dollar weakened modestly against other major currencies, reflecting ongoing hesitations in the pace and scale of future rate moves.
The Japanese yen strengthened, benefiting from expectations of a more fiscally-responsible government, while the euro and pound remained stable after recent economic releases.
Gold prices dipped slightly following the strong jobs data, as risk assets attracted investor funds.
London South East Outlook and Next Catalysts• Market focus has shifted to the upcoming U.S. inflation report, viewed as a critical indicator for determining the Federal Reserve’s future monetary-policy trajectory.
Continued strong economic data could further reduce rate-cut expectations, while weaker metrics might reinforce dovish pricing in markets.
London South EastContextual Summary:Bullish employment statistics have boosted global stock markets and tempered early-year worries of an economic downturn.
Despite this, pricing in the U.S. dollar and bond markets reflects caution, with investors awaiting additional data especially inflation to solidify expectations on Federal Reserve policy direction.
