NEW YORK/LONDON, June 7 (Reuters) - Global stocks retreated from all-time highs on Friday and U.S. government debt yields jumped after unexpectedly strong U.S. monthly jobs data doused hopes the Federal Reserve would soon follow euro zone and Canadian interest rate cuts.
The world's largest economy added 272,000 new jobs last month, beating the 185,000 new hires predicted by economists and derailing an investor consensus that the jobs market had slackened by just enough to push consumer prices lower.
"It's really quite difficult for the Fed to be anywhere near a rate cut," said Padhraic Garvey, regional head of research at ING in New York. "There's no urgency for the Fed to cut if the labor market is firm."
Diminished hopes for an imminent Fed move weighed on the MSCI's world share index (.MIWO00000PUS), opens new tab, which fell 0.2% after touching a record level on Thursday. Wall Street's performance was likewise lackluster. By 1425 GMT, the S&P 500 (.SPX), opens new tab was flat, the Dow Jones Industrial Average (.DJI), opens new tab edged up 0.24%, and the Nasdaq Composite (.IXIC), opens new tab lost 0.22%.
The benchmark 10-year U.S. Treasury yield , a benchmark for borrowing rates globally, leapt nearly 14 basis points after the jobs report to 4.4197%.
The two-year yield, which tracks interest rate expectations , climbed 13 basis points to 4.8532%, following six straight days of declines until Thursday. Bond yields rise as prices fall.
Money market pricing just after the payrolls data implied traders saw the Fed only starting to cut rates from their 23-year high of 5.25-5.5% by November. U.S. interest rate futures also lowered the chances of the Fed cutting rates by 25 basis points in September to 56%, down from around 70% on Thursday, according to LSEG's Fedwatch.
A September move had been strongly expected earlier in the day, particularly after the European Central Bank made a widely expected decision to cut its deposit rate from a record 4% to 3.75% on Thursday.
"This is a strong report, and it suggests that there are no signs of any cracks in the labour market," Spartan Capital Securities chief economist Peter Cardillo said.
“It’s a plus for economy and a plus for corporate earnings but it’s a negative in terms of the prospects of a rate cut perhaps as early as September.”
The Bank of Canada on Wednesday became the first G7 nation to trim its key policy rate, following cuts by Sweden's Riksbank and the Swiss National Bank.
The non-farms report also saw euro zone rate pricing go into reverse, with traders now pricing 55 bps of cuts in the region this year, from 58 bps before the data.
Europe's Stoxx 600 (.STOXX), opens new tab share index, which has gained almost 10% year-to-date, traded flat.
Euro zone bonds were also lacklustre on Friday, with Germany's 10-year Bund yield rising 8 bps to 2.619%.
Elsewhere, the dollar rose 0.6% against a basket of currencies, having been set for a weekly loss before the jobs data. The euro dropped 0.6% to $1.0823 following a slight gain in the previous session.
Brent crude oil futures rose 0.6% to $80.33 per barrel. A stronger dollar weighed on spot gold , which dropped 2.4% to $2,319.09 an ounce.
Editing by Christina Fincher and William Maclean
