Global stocks rise as investors cling to hopes for US rate cuts

SYDNEY/LONDON, Aug 4 (Reuters): Global stocks rose on Monday, boosted by the prospect of lower interest rates, after a weak US jobs report prompted a dramatic re-assessment of the rate outlook and ignited concern over the reliability of US economic data.

Friday's US July nonfarm payrolls report missed expectations and revised the figures for May and June sharply lower, sparking a selloff on Wall Street and denting the dollar.

By Monday, with the chance of a September rate cut from the Federal Reserve at 85 per cent, some stability returned to the broader market, allowing Europe's STOXX 600 to rise 0.6 per cent in morning trading. The dollar edged up against a basket of six other major currencies.

Downward revisions in the payrolls report left the three-month average of jobs growth at 35,000 from 231,000 at the start of the year.

"I guess the biggest takeaway from all that is the net revision. We've all seen poor NFP prints in the past, that we can explain away as a 'one-off', but such a chunky net downward revision suggests that this could well be a more pronounced weakening in labour market conditions that is underway," Pepperstone market strategist Michael Brown said.

President Donald Trump's decision to fire the head of Labor Statistics in response added an extra layer of nervousness over the credibility of US economic data.

News that Trump would get to fill a governorship position at the Fed early added to worries about the politicization of interest rate policy.