“There’s nothing here that’s going to keep the Fed from hiking interest rates next week,” said Heidi Learner, chief economist at Savills Studley, a unit of Savills Plc in New York.

Expectations the US central bank will hike rates next week rose to 92 per cent after the jobs report, data showed.

Shares on Wall Street posted broad-based gains while banking stocks in the euro zone hit their highest in more than a year on expectations the European Central Bank, after a meeting on Thursday, will tighten policy in March 2018.

The ECB indicated less urgency for more policy action and signalled an optimistic economic outlook for the euro zone.

The FTSEurofirst 300 index of leading European companies trimmed gains to close down 0.01 per cent to 1,470.53 as growing talk of ECB tightening hit utilities and export-oriented stocks.

MSCI’s all-country world stock index rose 0.6 per cent.

On Wall Street, the Dow Jones Industrial Average closed up 44.79 points, or 0.21 per cent, to 20,902.98. The S&P 500 gained 7.73 points, or 0.33 per cent, to 2,372.6 and the Nasdaq Composite added 22.92 points, or 0.39 per cent, to 5,861.73.

European bond yields soared on a report that said the ECB is preparing for a gradual phasing out of its stimulus measures, according to two sources familiar with the discussion.

Oil prices fell further on reports of heavy oversupply despite production cuts by the Organization of Petroleum Exporting Countries.

Brent crude oil settled down 82 cents at US$51.37 a barrel, while US crude fell 79 cents to settle at US$48.49. US crude has slumped nearly 9 per cent since Tuesday’s close in its biggest three-day decline since February 2016.

Analysts said they expected a period of market consolidation after this week’s heavy declines, but another sell-off is possible if investors are forced to sell loss-making contracts.

“The market remains overwhelmingly long and any further weakness will force additional reductions,” Saxo Bank’s head of commodity strategy, Ole Hansen, said at the Global Oil Forum.

The euro zone’s main gauge of borrowing costs posted its biggest fortnightly rise in nearly two years as investors prepared for rate hikes in the United States and eventually in Europe.

In sovereign debt markets, yields on Germany’s 10-year bond, an indication of the rate at which a country can borrow on financial markets, climbed 7 basis points to 0.496 per cent , a level last seen in January 2016 as funds ditched safe-haven German bonds.

“With the global economy now in firm recovery, central banks are gradually unplugging life support, a reality bond investors still cannot bear watching,” said Societe Generale strategist Ciaran O’Hagan.

Spot gold recovered from an early drop to five-week lows. US gold futures for April delivery settled down 0.2 per cent at US$1,201.40 an ounce.

The dollar and US Treasury yields fell after the US jobs report failed to meet elevated expectations, tempering the immediate outlook for future interest rate increases.

Economists at Goldman Sachs said they expect the Fed to raise rates next week for the first time this year and they now see the next hike in June, rather than September.

The euro was up 1.03 per cent to US$1.0684.

The dollar index, which tracks the greenback against six major world currencies, fell 0.56 per cent to 101.280.

Benchmark Treasury yields receded from 12-week highs. The 10-year Treasury note rose 5/32 in price, pushing yields down to 2.580 per cent.