(Bloomberg) — Asian stocks rose after stronger-than-expected US payroll data underscored the health of the world’s largest economy and boosted optimism over a soft landing.
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Equity benchmarks in Australia, South Korea and Japan all gained gained after the S&P 500 and Treasury yields rose on Friday as traders trimmed bets on Federal Reserve interest-rate cuts. US 10-year yields climbed a further one basis point Monday, nearing the key 4% threshold.
Trading is being shaped by signs of US economic resilience, after US employers added the most jobs in six months in September. Wagers on a “no landing” scenario — where growth momentum remains intact and inflation reignites — stand to boost the dollar while triggering a drop in Treasuries and other haven assets. Adding to the upbeat picture is the prospect of further gain in Chinese shares when the market reopens Tuesday after week-long holiday.
While a US recession is possible, it’s not likely and “given the jobs report from Friday, that probability has become lower yet still,” said Vikas Pershad, a fund manager at M&G Investments, speaking on Bloomberg Television. “We’re not surprised there has been a rally in Chinese equities, we have added significant capital to China throughout the year.”
Chinese authorities have announced a number of stimulus measures over the past two weeks. Officials from the National Development and Reform Commission will hold a briefing on Tuesday on implementing incremental economic policies.
While Chinese shares have skyrocketed since late-September due to the barrage of economic, financial and market-support, firms such as Invesco Ltd., JPMorgan Asset Management, HSBC Global Private Banking and Wealth, and Nomura Holdings Inc. are among those viewing the rebound with skepticism. There have been a number of false dawns before.
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.
Oil drifted lower as traders weighed Israel’s potential retaliation against Iran for a missile attack last week, with President Joe Biden discouraging a strike on Tehran’s crude fields.
This week, Germany is expected to downgrade its growth outlook while a slew of inflation readings in emerging markets are due. Minutes from the Fed’s September policy meeting will also be released as well as the September CPI print before the start of earnings season.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 9:59 a.m. Tokyo time
Hang Seng futures fell 1%
Nikkei 225 futures (OSE) rose 2.4%
Japan’s Topix rose 1.7%
Australia’s S&P/ASX 200 rose 0.3%
Euro Stoxx 50 futures rose 0.3%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0971
The Japanese yen rose 0.2% to 148.41 per dollar
The offshore yuan was little changed at 7.0923 per dollar
Cryptocurrencies
Bitcoin rose 1.7% to $63,682.6
Ether rose 2% to $2,486.86
Bonds
Commodities
West Texas Intermediate crude fell 0.5% to $74.02 a barrel
Spot gold fell 0.2% to $2,649.47 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess.
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