European stocks fell and bond prices rose sharply after a dismal employment reports from the US and Canada raised serious questions about the health of the global economic recovery.
US employers added only 88,000 jobs last month, the US Department of Labor said in its monthly employment report Friday, the fewest total since 2008 and more than 120,000 shy of analysts' estimates. Headline unemployment in the world's biggest economy fell to 7.6 percent from 7.7 percent, the report said, but the labour force participation rate - a key indicator on those actively seeking work - fell to 63.3 percent, the lowest reading since 1979. In Canada, the federal statistics office said in its Labour Force Survey that a surprise 55,000 jobs were lost last month, lifting the country's unemployment rate by 0.2 percent to 7.2 percent.
Benchmark US Treasury bonds rose sharply after the payroll release, taking the yield to 1.7 percent, the lowest since October of last year, as investors bet the grim employment data will compel the US Federal Reserve to continue buying as much as $85bn in various government and agency bonds each month as part of its on-going programme of quantitative easing.
At the same time, however, the US dollar fell on foreign exchange markets, taking sterling to a 6-week high of $1.5315. Gold rose to a session high of $1,566.70 per ounce.
In Europe, the FTSE Eurofirst 300, extended declines on the session to 18.54 points, or 1.57 percent. The broadest measure of blue-chip share prices in Europe has fallen 3.6 percent so far this week.
Britain's FTSE 100 slid further, suffering triple-digit losses to trade 1.8 percent lower at 6,230.45.
Benchmark German bund futures hit their highest levels since at least June of last year, according to Reuters data, trading 53 ticks higher at 146.49. Ten-year bund yields fell 4 basis points to 1.215 percent, the lowest since July of last year.
US stocks opened the final trading day of the week with a 1 percent decline for the S&P 500, taking the benchmark around 14 points lower to 1,542. The tech-heavy Nasdaq fell around 1.6 percent in the opening minutes of trading while the Dow Jones Industrial Average lide 1.1 percent, or 150 points, to dip under 14,500.