Asian shares chase early gains after US jobs report: Markets close

(Bloomberg) — Most Asian stocks are set to open higher in early trade after strong U.S. jobs data underscored the health of the world’s largest economy and boosted hopes of a soft landing.

Bloomberg’s most read

Australian shares and Japanese stock futures rose, while Hong Kong futures fell. U.S. contracts rose early Monday after the S&P 500 rose 0.9 percent on Friday. The dollar was flat after its best week in two years as Treasury yields rose amid recalibrated bets on the size of the Federal Reserve’s next rate cut.

The so-called soft landing narrative has taken over markets again, fueling fears of a US recession after employers added 254,000 jobs in September – the most in six months – and the unemployment rate unexpectedly fell . A number of other economic data last week – including private sector jobs and a measure of the services sector – painted a picture of a strong US economy.

“The tailwinds in Asia are probably more significant than anywhere else in the world,” with the Goldilocks economy in the U.S. and fresh Chinese stimulus, said Kyle Rodda, senior analyst at Capital.com. “This is a very opportune time to reallocate to Asia, given that there are signs of clear economic strength and therefore outperformance in the cyclical sectors to which Asia is heavily weighted.”

Asian currencies, however, are poised to unwind further last quarter’s gains after a dollar gauge climbed 0.4 percent, weighing on emerging markets. The Korean won fell more than 1 percent after the jobs report, while futures for the Indonesian rupiah, Philippine peso and Thai baht fell, pointing to early losses as spot markets reopened.

While expectations for a Fed rate cut have adjusted, “more needs to be done,” said Win Thin, global head of markets strategy at Brown Brothers Harriman. “This week brings key US inflation data that should help extend the dollar’s recovery and keep downward pressure on emerging FX markets.”

Traders will soon move to prepare for China’s reopening on Tuesday after stimulus measures announced ahead of the Golden Week holiday lifted Hong Kong stocks to their highest level since March 2022. Officials from the National Development and Reform Commission will host a briefing on the implementation of incremental economic policies.

The story continues

“The market will be keen to hear substances that could lead to increased animal spirits, demand and consumption,” Chris Weston, head of research at Pepperstone Group, said of the NDC meeting. “It’s hard to put into context the rally we’ve seen in these stock indexes,” and they’ve all found strong buying support at the slightest pullback, he said.

Elsewhere in Asia, New Zealand bonds fell less than Treasuries as markets anticipate the nation’s central bank will cut interest rates by 50 basis points on Wednesday. The Australian bond market was closed for a holiday in Sydney.

Oil fell in early trade on Monday as traders weighed potential Israeli retaliation against Iran for a missile attack last week, with President Joe Biden discouraging a strike on Tehran’s crude oil fields.

This week, Germany is expected to cut its growth outlook, while a number of emerging market inflation readings follow. Minutes from the Fed’s September policy meeting will also be released, as well as the September CPI print before earnings season begins.

Some of the main movements in the markets:

Stocks

• S&P 500 futures were little changed as of 8:25 a.m. Tokyo time

• Hang Seng futures down 1%

• Australia’s S&P/ASX 200 rose 0.1%

• Nikkei 225 futures rose 2.6%

Coins

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0970

• The Japanese yen fell 0.2 percent to 149.01 per dollar

• The offshore yuan was little changed at 7.0971 per dollar

• The Australian dollar was little changed at $0.6801

Cryptocurrencies

• Bitcoin was little changed at $62,644.43

• Ether was down 0.2% at $2,434.49

BONDS

commodities

This story was produced with the help of Bloomberg Automation.

Bloomberg Businessweek’s most read

©2024 Bloomberg LP