Trading Day: Payrolls surprise, another yen rise

Market Reactions to U.S. Jobs Data

ORLANDO, Florida, Feb 11 (Reuters) - Wall Street wobbled and Treasury yields rose on Wednesday following the release of stronger-than-expected U.S. jobs data, while Japan's yen extended its strong post-election rally for a third day.

In my column today, I look at U.S. workers' share of GDP, which has slumped to the lowest on record, and ask whether a productivity boom might reverse this multi-year trend. In theory, it could. In practice, it's highly unlikely.

If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.

1. U.S. job growth accelerates in January,unemployment rate falls to 4.3% 2. Software selloff is disrupting some M&A and IPO deals,U.S. bankers say 3. Euro and yuan global ambitions hasten the dollar drop -Mike Dolan 4. China makes small dent in deflation battle assupply-demand imbalance persists 5. EXCLUSIVE-CME looks into launching first ever rare earthfutures contract, sources say

Key Market Moves

Today's Key Market Moves

* STOCKS: Wall Street's big three indices little-changed.UK FTSE 100, Europe, Brazil, MSCI Asia ex-Japan, MSCI World allhit record highs. * SECTORS/SHARES: U.S. energy +2.6%, consumer staples+1.4%, comms services -1.3%, financials -1.2%. Caterpillar +4%,IBM -6.5% * FX: Dollar mostly rises, but not against the surging yenor Aussie. Bitcoin -2% below $68,000. * BONDS: U.S. yields spike as much as 6 bps at the shortend, curve bear flattens. 10-year auction on the soft side. * COMMODITIES/METALS: Oil +2%, gold +2%, silver up 4%.Comex copper +1%.

Today's Talking Points

* Maybe not so "clueless" after all?

Yen Performance Against Dollar

The delayed January U.S. jobs data on Wednesday showed that the economy created 130,000 new jobs last month, nearly twice the amount forecast, and the unemployment rate eased back to 4.3%. Earnings growth of 3.7% was stronger than expected too.

Putting to one side the annual revisions and issues around shrinking labor supply, these headline numbers suggest the labor market is stabilizing and the Fed can afford to stay on pause for longer. Just as Chair Jerome Powell has indicated. Maybe he's not as "clueless" as President Donald Trump would have us believe?

* It's reigning yen

Japan's currency is on a tear, extending its post-election rally and clocking a third daily rise against the dollar of around 1%. It's on course for a weekly rise of 3%, which would be the yen's best week since November 2024.

What's interesting about Wednesday's rise is it came while the dollar was rising more broadly. The yen's immediate test is 152/$ then 148/$, where it was just before Prime Minister Sanae Takaichi won the LDP leadership contest. Once it's back there, the political risk premium has essentially been taken out of its price.

* AI - end of days or brave new world?

AI's Influence on Markets

The direction of travel isn't in doubt, but the speed and ultimate destination are. Assessing, quantifying and predicting artificial intelligence's transformative powers is dominating equity markets - we are in the relatively early stages of the AI revolution, so divergence, dispersion, and volatility reign.

Among the findings in a Morgan Stanley report this week are: upward earnings revisions for AI Adopters have outpaced the AI-Disrupted by ~2x; AI-driven benefits over the next two years will be heavily skewed toward cost efficiency over revenue growth; AI adoption expected to benefit 49% of North America stocks covered, 37% in Asia, 43% in Europe.

What could move markets tomorrow?

* Japan wholesale inflation (January) * Japan earnings including Nissan, Rakuten, SoftBank * India inflation (January) * ECB board members Piero Cipollone, Pedro Machado andPhilip Lane speak at separate events * UK GDP (Q4, prelim) * UK trade (December) * UK industrial production (December) * U.S. weekly jobless claims * U.S. Treasury auctions $25 billion of 30-year bonds * Global earnings including Applied Materials, Unilever,Anheuser-Busch InBev, British American Tobacco, Airbnb * U.S. Federal Reserve officials scheduled to speak includeGovernor Stephen Miran (after the market close)

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

(By Jamie McGeever; Editing by Nia Williams)