Atheer – External Sources
Relief swept across Asian share markets on Monday, after the latest US jobs report managed to impress with its strength, while also easing fears of inflation and faster rate hikes, something that sharpened risk appetites globally.
According to Reuters, MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.3 percent, poised for a third session of gains. South Korea rose one percent while Australia’s main index added 0.7 percent, boosted by mining shares on news that Australia could be exempt from new US trade tariffs on steel and aluminum imports. E-Mini futures for the S&P 500 put on another 0.3 percent.
Japan’s Nikkei jumped 1.2 percent, showing little immediate reaction as Prime Minister Shinzo Abe came under renewed fire over suspicions of cronyism involving the sale of state-owned land.
Inflation worries faded on Friday after US data showed nonfarm payrolls jumped by 313,000 jobs last month, but annual growth in average hourly earnings slowed to 2.6 percent after a spike in January.
The pullback in wages tempered speculation the Federal Reserve would project four rate hikes, or dot plots, at its policy meeting next week, instead of the current three.
“The release threaded the stock needle perfectly, exhibiting strong overall net job adds alongside an increase in the participation rate and tepid wages suggesting that labour demand is being met by new entrants into the workforce,” said analysts at JPMorgan in a note.
“In reality though the market is probably reading too much into a single jobs report,” they cautioned.
“A fourth dot on the 21st of March may have been averted but the labour market is increasingly demonstrating evidence of tightness and this will inevitably translate into upside wage pressure.”
For now, Wall Street was happy to take the data at face value and the Dow jumped 1.77 percent, while the S&P 500 gained 1.74 percent and the Nasdaq 1.79 percent.
On the week, the S&P rose 3.5 percent, the Dow 3.25 percent and Nasdaq 4.2 percent.
The jobs news likewise lifted riskier currencies, including the Mexican peso and the Canadian and Australian dollars, while weighing on the safe-haven yen.
Those cross currents left the US dollar a shade lower against a basket of currencies at 89.973. The euro was last up a fraction at $1.2323.
The dollar edged down on the yen to 106.38, having bounced 0.5 percent on Friday.
Investors had trimmed holdings of yen last week following news that US President Donald Trump was prepared to meet with North Korea’s Kim Jong Un, in what would be a potential breakthrough in nuclear tensions in the region.
US officials on Sunday defended Trump’s decision, saying that the move was not just for show and not a gift to Pyongyang.
The mix of brisk US economic growth and restrained inflation was a positive one for most commodities.
Spot gold was steady on Monday at $1,323.61 per ounce.
Brent crude futures rose seven cents to $65.56 a barrel, after surging almost three percent on Friday. US crude futures rose six cents to $62.10 per barrel.
