Equities fall with US Treasury yields after data, oil sinks

By Sinéad Carew and Elizabeth Howcroft NEW YORK/ PARIS, Dec 16 (Reuters) – MSCI's global equities gauge fell on Tuesday and 10-year U.S. Treasury yields were lower for a second day as investors assessed the latest U.S. jobs data, while oil prices sagged as talks appeared to boost the prospects for a Russia-Ukraine peace deal. The U.S. Labor Department reported a nonfarm payroll increase of 64,000 jobs last month and that the unemployment rate rose to 4.6%. The job numbers reversed October's 105,000 jobs decline, which had reflected the departure of more than 150,000 federal employees who took deferred buyouts as part of the Trump administration's push to shrink the government's footprint.  However, the 43-day U.S. government shutdown through October into mid-November created some uncertainty about what the report means for the economy and the Federal Reserve's outlook for interest rate policy after its 25 basis point cut last week.  While relatively low wage growth and anaemic November job creation provided hope for more Fed rate cuts, David Wagner, portfolio manager at Aptus Capital Advisors, said that the return to job increases in November could also support more hawkish views that rates should hold steady. "Investors are still trying to digest this data. The jobs report was somewhat Goldilocks – not too bad and not too good. Both hawkish and dovish investors have enough data to prove their current thesis," Wagner said while also pointing to "the noise in the data given that the shutdown continued into the middle of November." On Wall Street at 11:55 a.m. (1655 GMT), the Dow Jones Industrial Average was down 274.44 points, or 0.56%, at 48,145.59, the S&P 500 fell 32.49 points, or 0.47%, to 6,784.55 and the Nasdaq Composite was down 40.76 points, or 0.18%, at 23,016.28. MSCI's gauge of stocks across the globe  fell 6.26 points, or 0.62%, to 1,001.50 while the pan-European STOXX 600 index was 0.41% lower. Earlier, stocks had declined during Asian trading, with MSCI's broadest index of Asia-Pacific shares outside Japan dropping 1.3% and touching its lowest in three weeks.  CENTRAL BANK MEETINGS, MORE DATA Investors are also waiting for U.S. inflation data and central bank meetings including rate policy decisions from the Bank of England, the European Central Bank and the Bank of Japan this week. U.S. Treasury yields were mixed on Tuesday with benchmark 10-year note yields reversing an earlier drop as traders attributed an unexpected increase in the unemployment rate last month to possible government shutdown-related distortions. The yield on benchmark U.S. 10-year notes fell 2.5 basis points to 4.157%, from 4.182% late on Monday while the 30-year bond yield  fell 2.1 basis points to 4.8313%. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 2.1 basis points to 3.487%, from 3.508% late on Monday. In currencies, the U.S. dollar fell against major peers on Tuesday after expectations for Fed rate cuts stayed intact after the jobs report. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.13% to 98.13. The euro was up 0.11% at $1.1766 and against the Japanese yen, the dollar weakened 0.25%. Sterling strengthened 0.35% to $1.342 although unemployment in Britain hit its highest since the start of 2021 and wage growth in the private sector was the weakest in nearly five years last month, according to the latest data. Oil prices fell, with Brent dropping below $60 a barrel for the first time in months, as traders considered a Russia-Ukraine peace deal as more likely, raising expectations that sanctions could be eased, which could lead to more oil availability and therefore lower prices. U.S. crude fell 2.38% to $55.47 a barrel and Brent slid to $59.13 per barrel, down 2.38% on the day. In precious metal markets, gold prices  lost earlier gains to turn slightly lower. Spot gold fell 0.05% to $4,299.65 an ounce.  (Reporting by Sinéad Carew in New York, Elizabeth Howcroft in Paris; Editing by Sharon Singleton and Susan Fenton)

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