Bloomberg — Asian stock markets point to a strong open as China returns from its three-day vacation and Friday’s softer-than-expected U.S. jobs report revives bets that the Federal Reserve will cut rates this year .
U.S. stock futures rose in early trading, after the S&P 500 rose 1.3% in the previous session, while Australian and Hong Kong contracts point to gains on Monday. A gauge of Chinese stocks listed on the Nasdaq rose 5.5% last week, pointing to a strong open when mainland markets reopen. Japanese markets are closed for holidays.}
The positive sentiment comes after global stock markets rose for the second consecutive week. U.S. Treasuries rose on Friday following the payrolls release, and cooling wages soothed investors worried about “stagflation” or recession. On the contrary, the data encouraged supporters of a gradually slowing economy, which would allow the data-dependent Federal Reserve to begin easing its monetary policy at the end of the year. Australian and New Zealand bonds also rose on Monday.
World stock markets continue in an upward trend | Equities have room to rise as momentum indicator remains bullish(Bloomberg)
A litany of weaker-than-estimated data last week – from employment to services and manufacturing – pushed the US version of Citigroup’s Economic Surprise Index to its lowest level since February 2023. The gauge measures the difference between published data and analysts’ expectations. Nonfarm payrolls advanced 175,000 in April, the smallest gain in six months.
“The market has gained confidence that the U.S. economy is not overheating,” said Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne. “Conviction levels may remain low, but the platform is set for risk assets to rise this week, especially if the Gaza truce talks gain real traction.”
Oil rose in early trading after Israel closed the humanitarian crossing from Kerem Shalom to Gaza on Sunday following a barrage of rockets fired by Hamas, in an incident that could derail weeks-long delicate negotiations over hostages and ceasefire. Saudi Arabia raised the price at which it sells crude oil to Asia in its attempt to tighten the oil market.
Traders will also take into account the series of central bank meetings this week, led by the likely hawkish Reserve Bank of Australia on Tuesday, following higher-than-expected inflation data from the last month. Data will also be published on activity in China and on inflation in the main emerging markets.
Some key events this week:
China Caixin Services PMI, Monday
S&P Global Services PMI, Eurozone PPI, Monday
Australian interest rate decision Tuesday
Retail sales in the Eurozone, Tuesday
UBS, Walt Disney, BP results, Tuesday
Minneapolis Fed President Neel Kashkari, Tuesday
Decision on interest rates in Brazil, Wednesday
Interest rates in Sweden, Wednesday
Toyota results, Wednesday
Chinese trade, Thursday
Malaysia: interest rate decision Thursday
CPI Mexico, rate decision, Thursday
United Kingdom: Interest rates, Thursday
Unemployment Canada, Friday
Industrial production, GDP, United Kingdom, Friday
Chicago Fed President Austan Goolsbee, Friday
Some of the main movements in the markets:
Actions
S&P 500 futures rose 0.2% at 8:14 a.m. Tokyo time.
Hang Seng futures rose 0.6%.
S&P/ASX 200 futures rose 0.3%.
Foreign exchange
Bloomberg dollar spot index little changed
The euro was exchanged at 1.0762.
The Japanese yen was exchanged at 153.20 per dollar.
The yuan was exchanged at 7.1953 per dollar.
The Australian dollar was exchanged at 0.6614.
Bonuses
The Australian 10-year bond yield fell three basis points to 4.39%.
Cryptocurrencies
Bitcoin rose 0.3% to 63,906.32.
Ether was little changed at 3,137.9.
Raw Materials
A barrel of West Texas Intermediate crude oil rose 0.5% to 78.49.
Spot gold barely changed
This article was produced with the help of Bloomberg Automation.
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