* US jobs data stuns markets
* Slowest pace of job growth since Sept 2010
* June rate hike bets wiped out
By Jamie McGeever
LONDON, June 3 (Reuters) - Stocks, the dollar, oil and bond
yields all dived on Friday after data showing the slowest pace
of U.S. job growth in more than five years stunned investors and
virtually wiped out any lingering expectation the Federal
Reserve will raise interest rates later this month.
Non-farm payrolls rose by just 38,000 in May, the lowest
since September 2010 and far below the expected 164,000. All 105
economists polled by Reuters had expected a higher number.
ECONUS
"These aren't good numbers. This will give the Fed serious
headaches. A June hike looks a lot less likely now," said
Aberdeen Asset Management Investment Manager Luke Bartholomew.
"The caravan will move on to July now and we'll wait to see
if the payroll numbers ahead of that meeting are any better," he
said.
European shares turned negative, with both the pan-European
FTSEurofirst 300 .FTEU3 and the STOXX Europe 600 .STOXX
indexes trading 0.6 percent lower.
U.S. futures pointed to a fall of around 0.6 percent at the
open on Wall Street.
The dollar fell across the board as traders virtually wiped
out all bets on June rate hike. The euro rallied more than 1
percent to $1.2190 EUR= , and the dollar slid 1 percent to
107.60 yen JPY= .
Futures markets now attach only a 2 percent probability to
the Fed raising rates later this month, down from 20 percent
before the jobs report.
The 10-year U.S. Treasury yield fell 8 basis points - the
biggest fall in four months - to 1.73 percent US10YT=RR , while
the two-year yield fell 10 basis points to 0.79 percent
US2YT=RR . That was its biggest fall since September.
Germany's benchmark 10-year Bund yield extended its decline
to 0.073 percent, its lowest level this year DE10YT=TWEB and
British 10-year government bond yields GB10YT=RR dropped to
their lowest level in almost four months at 1.291 percent, down
5 basis points on the day.
In commodity markets, Brent crude oil was down 1 percent at
$49.65 a barrel LCOc1 .