Payroll data showed U.S. companies added 295,000 jobs in February, well above forecasts for an increase of  240,000. It was the longest run of 200,000-plus increases since 1994. The rate dropped to a lower-than-expected 5.5 percent from 5.7 percent in January.

The dollar surged after the report. The euro tumbled below $1.09 and the yen weakened to more than 120 yen to the dollar."Everyone was pretty soundly surprised by this," said Bruce Mccain, chief investment strategist at Key Private Bank in Cleveland, Ohio. "Any sign of undue strength will raise the spectre of rates climbing sooner than expected, and we were already expecting rates to rise this year."

With the Fed heading for a hike and the ECB about to embark on a 1 trillion-euro bond-buying campaign, the gap between German and U.S. bond yields stretched to its widest in more than a quarter of a century.  U.S. 2-, 5-, 7-, 10- and 30-year treasury yields all rose to their highest in more than two months after the report. The 2-year was last at 0.697 and the benchmark 10-year at 2.193.

 The potential pressure on companies from a high dollar and rising interest rates saw Wall Street futures prices turn negative before the start of trading. Europe's bourses  extended gains as the euro took another step lower.

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