Markets struggle as strong US jobs boost Fed rate hike bets

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Asian markets struggled Monday and the dollar held big gains as a blockbuster US jobs report ramped up bets that the Federal Reserve will announce more sharp interest rate hikes as it tries to tame runaway inflation.

While the employment reading -- which was more than twice as high as expected -- indicated the world's top economy remained resilient despite rising prices and borrowing costs, it will complicate the bank's plans to tighten monetary policy.

"Friday's payroll report indicates an overheated labour market that continues to tighten further," said SPI Asset Management's Stephen Innes. The"report seems very unlikely to offer 'compelling evidence' of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode." Innes added.

The prospect of higher interest rates sent the dollar surging, and it held on to those gains in Asia.

 

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