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Europe's stock markets rose Monday as investors continued to shrug off red-hot US jobs data and comments by Federal Reserve boss Jerome Powell which shattered any remaining hopes for a March interest rate reduction.
"The markets continue to forge ahead despite a blowout jobs report from the US last Friday which seems to have finally put the nail in the coffin of the idea rates will be cut next month," said AJ Bell investment director Russ Mould.
Fed policymakers had left traders disappointed last week when they said after a meeting that they were unlikely to loosen policy at their next gathering.
There were still some rumblings of a change in view if the non-farm payrolls data came in below expectations, but they were soon extinguished Friday by the highest reading in a year, while December's figure was ramped up.
The figures showed the labour market and world's biggest economy remained robust despite borrowing costs sitting at two-decade highs, giving little room to the Fed to cut even as inflation comes down.
That was followed by the airing Sunday of an interview with Powell in which he said the bank wanted to see more data.
The "danger of moving too soon is that the job's not quite done, and that the really good readings we've had for the last six months somehow turn out not to be a true indicator of where inflation's heading", he told the CBS news programme "60 Minutes".
"The prudent thing to do is to... just give it some time and see that the data continue to confirm that inflation is moving down to two percent in a sustainable way," he said in the interview, which was conducted before the jobs report was released.
The chances of a March reduction plunged to 20 percent after the reading, down from around 40 percent Thursday, according to Bloomberg News. They had been about 80 percent at the start of the year.
"Initially, markets were anticipating six cuts starting in March," said Stephen Innes at SPI Asset Management.
"However, Powell's recent remarks suggest such an early move was improbable. Combined with a robust January jobs report, hopes of an early spring adjustment have moved from improbable to impossible."
Still, Wall Street ended Friday with more big gains for all three main indexes, pushing the S&P 500 to a fresh record thanks to a rally in tech giants Meta and Amazon in the wake of strong earnings.
The advance in New York was fuelled by optimism that the economy is not likely to fall into recession, while rates are also still expected to come down.
Most of Asia struggled again, however, with Hong Kong and Shanghai extending a sell-off fuelled by growing concerns about the Chinese economy.
- Key figures around 1145 GMT -
London - FTSE 100: UP 0.5 percent at 7,650.43 points
Paris - CAC 40: UP 0.1 percent at 7,602.77
Frankfurt - DAX: UP 0.3 percent at 16,970.93
EURO STOXX 50: UP 0.3 percent at 4,666.44
Tokyo - Nikkei 225: UP 0.5 percent at 36,354.16 (close)
Hong Kong - Hang Seng Index: DOWN 0.2 percent at 15,510.01 (close)
Shanghai - Composite: DOWN 1.0 percent at 2,702.18 (close)
New York - Dow: UP 0.4 percent at 38,654.42 (close)
Euro/dollar: DOWN at $1.0757 from $1.0788 on Friday
Dollar/yen: UP at 148.39 yen from 148.38 yen
Pound/dollar: DOWN at $1.2578 from $1.2631
Euro/pound: UP at 85.51 pence from 85.40 pence
West Texas Intermediate: DOWN 0.6 percent at $71.86 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $76.98 per barrel
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