Asian markets mostly rise as traders weigh rates outlook

Asian markets mostly rise as traders weigh rates outlook

Oil prices are in retreat, having hit a five-month high last week on geopolitical tensions and strong economic data
Oil prices are in retreat, having hit a five-month high last week on geopolitical tensions and strong economic data. Photo: Brandon Bell / GETTY IMAGES NORTH AMERICA/Getty Images via AFP
Source: AFP

Most Asian markets squeezed out gains Monday as traders weighed the chances of the Federal Reserve cutting interest rates this year after a forecast-busting US jobs report dented hopes for a first move in June.

Wall Street's three main indexes rallied Friday on news that 303,000 jobs were created in the United States in March, with investors focusing on the positives for the economy instead of the monetary policy implications.

However, observers warned that the figures -- which also showed unemployment falling and wage growth still strong -- could prevent the Fed from cutting rates three times in 2024, as it has previously indicated.

Traders are now awaiting the release this week of minutes from the central bank's most recent meeting, as well as the latest consumer price index reading.

Read also

ECB tipped to pause one last time before June rate cut

The CPI "will be a bigger test of whether the recent inflation bump is a trend or not", said Saxo's Redmond Wong, referring to bigger-than-expected inflation figures at the start of the year.

Still, Marc Chandler at Bannockburn Global Forex warned that "reasons to dismiss the employment data are becoming thinner".

PAY ATTENTION: Let yourself be inspired by real people who go beyond the ordinary! Subscribe and watch our new shows on Briefly TV Life now!

"The economy is still growing faster than what the Fed regards as the long-term non-inflation pace."

There is now growing talk that the Fed will not even be able to cut rates three times this year, with some suggesting that if data continued to come in strong then officials could face pressure to hold off until 2025.

Erik F. Nielsen at UniCredit Group added: "Based on existing economic data, i.e. if purely 'data-dependent', the Fed could easily end up cutting rates only once this year, if at all."

Read also

US hiring blows past expectations in March

Asian investors battled to take the baton from Wall Street with most markets ticking higher.

Hong Kong, Tokyo, Sydney, Seoul, Singapore, Mumbai and Taipei rose, but Shanghai, Manila and Wellington were down.

London and Paris were both flat at the open while Frankfurt started slightly higher.

Investors are also keeping tabs on geopolitics, with state-linked Egyptian outlet Al-Qahera saying Monday that talks in Cairo aimed at brokering a truce between Israel and Hamas had been positive.

The report said there was "significant progress being made on several contentious points of agreement", citing a high-ranking Egyptian source.

However, Israel said Sunday it was still preparing for military operations in Gaza's southernmost city of Rafah, even after announcing a partial withdrawal from the territory.

Meanwhile, eyes are also on Iran, which has threatened to retaliate against Israel after blaming it for a deadly attack on its embassy in Damascus.

Revolutionary Guards chief General Hossein Salami warned Israel "cannot escape the consequences" of last week's strike.

Read also

Asian equities tumble, oil extends gains on Middle East worries

The sliver of hope for a halt to fighting weighed on oil prices Monday, with both main contracts down more than one percent.

Still, they remain around five-month highs on supply worries in the event of the Middle East crisis morphing into a wider war between Israel and Iran, while the strong US economy and Ukraine war were also lending support.

Gold retreated after hitting a fresh record of $2,330.50 on Friday, having surged on the back of rate-cut bets and geopolitical worries.

Key figures around 0715 GMT

Tokyo - Nikkei 225: UP 0.9 percent at 39,347.04 (close)

Hong Kong - Hang Seng Index: UP 0.1 percent at 16,745.10

Shanghai - Composite: DOWN 0.7 percent at 3,047.05 (close)

London - FTSE 100: FLAT at 7,911.52

Dollar/yen: UP at 151.80 yen from 151.61 yen on Friday

Euro/dollar: DOWN at $1.0834 from $1.0841

Pound/dollar: DOWN at $1.2630 from $1.2637

Read also

Asian markets lifted by US data and fresh rate cut hopes

Euro/pound: UP at 85.77 pence from 85.75 pence

West Texas Intermediate: DOWN 1.6 percent at $85.50 per barrel

Brent North Sea Crude: DOWN 1.7 percent at $89.66 per barrel

New York - Dow: UP 0.8 percent at 38,904.04 (close)

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.

Online view pixel