(Bloomberg) — Global stocks continued their recovery in Asia, tracking gains on Wall Street after signs of a slowdown in the U.S. labor market eased concerns about a slowdown.
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Stocks soared from Japan to South Korea and Australia. While Hong Kong stocks maintained their gains, those in mainland China lost momentum as better-than-expected inflation mainly resulted from seasonal factors such as weather. Markets are closed in Singapore.
US stock futures rose in Asia following a rally on Wall Street on Thursday. The S&P 500 had its best day since November 2022, while the Nasdaq advanced 3.1%.
The dollar has fallen since April 2022, tracking emerging market currencies. Treasury yields in Asia edged lower after three days of gains.
Risk appetite improved after a better U.S. jobless claims report eased fears of a slowdown fueled by worse-than-expected employment data last week. Attention will now turn to a new set of US economic indicators due next week, including consumer prices.
“The storm clouds have parted” for Asian markets, said Tony Sycamore, market analyst at IG Australia. “I think we’re going up now until we see another growth scare, but Japan may be off the investor radar for a while.”
It remains to be seen how long the recent rebound will last as investors continue to digest various signals from policymakers. For one, Federal Reserve Bank of Kansas City President Jeffrey Schmidt indicated that the U.S. is not ready to support cutting interest rates with inflation above target, according to comments released Thursday.
Swap traders have further cut bets on aggressive Fed easing in 2024. The global revaluation was so sharp that at one point interest-rate swaps were 60% likely to be cut by the central bank next week – ahead of its next scheduled meeting in September. Current pricing implies a 40 basis point cut for September.
In Japan, shares of Tokyo Electron Ltd rose after it raised its profit forecast for the fiscal year to March and reported a better-than-expected surge in sales.
The yen was flat against the dollar after three days of weakness.
Following Thursday’s rally, oil rose slightly on the back of heightened tensions in the Middle East. Gold fell.
Meanwhile, steel and aluminum producers in Canada have urged Prime Minister Justin Trudeau’s government to quickly impose new tariffs on Chinese products, saying the Asian powerhouse’s metals flood the Canadian market and threaten local jobs.
Highlights of this week:
Some key movements in the markets:
Shares
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S&P 500 futures were up 0.2% as of 1:15 p.m. Tokyo time.
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Nasdaq 100 futures rose 0.3%
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Japan’s Topix rose 1%
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Australia’s S&P/ASX 200 rose 1.3%
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Hong Kong’s Hang Seng rose 1.8%
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The Shanghai Composite rose 0.1%
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Euro Stoxx 50 futures rose 0.4%
Coins
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The Bloomberg Dollar Spot Index fell 0.2%
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The euro was little changed at $1.0922
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The Japanese yen was little changed at 147.16 per dollar
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The offshore yuan was up 0.2% at 7.1664 per dollar
Cryptocurrencies
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Bitcoin rose 2.8% to $61,211.98
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Ether rose 4.7% to $2,692.46
Bonds
materials
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West Texas Intermediate crude was up 0.2% at $76.33 a barrel.
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Spot gold was down 0.3% at $2,421.39 an ounce
This story was produced with the help of Bloomberg Automation.
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