Written by Kevin Buckland
TOKYO (Reuters) – Asian stocks rallied and the dollar weakened on Monday after big U.S. labor market data eased fears of a recession and sharply lowered hopes for interest rate cuts. The yen hit a new high for the first time in seven weeks.
U.S. Treasury yields hit a two-month high and rose after Friday’s closely watched non-farm jobs report showed economic growth in September unexpectedly showed the biggest job gain in six months. Expanded width.
Oil prices fell from a one-month high even as Israel bombed targets in Lebanon and the Gaza Strip, and Monday marked one year since the Hamas attack that sparked the war.
Japan’s Nikkei Stock Average led the rise in regional stocks, rising 2.28% as of 0515 GMT, with further momentum from the weaker yen.
Hong Kong’s Hang Seng rose 1.45%, Australia’s stock benchmark rose 0.68% and South Korea’s Kospi rose 1.53%. Mainland Chinese stocks will be closed until Tuesday due to the Golden Week holiday.
MSCI’s broadest index of Asia-Pacific shares rose more than 1%.
US Dow futures fell slightly after the cash index ended at an all-time high following Friday’s jobs report.
“The market reaction tells market participants what the important themes and risks are at this moment,” said Kyle Rodda, senior financial markets analyst at Capital.com. “The impact on future earnings.”
“It appears that America’s economic exceptionalism trade is also making a comeback.”
The dollar rose to 149.10 yen for the first time since August 16, and last traded at 148.49 yen.
The Geins were arrested after Jun Mimura, Japan’s top currency diplomat, said government officials were monitoring foreign exchange movements, including speculative trading, “with a sense of urgency.”
The euro fell 0.08% to $1.0966, retreating toward Friday’s seven-week low of $1.09515.
Expectations for a massive 50 basis point (bp) rate cut in the Federal Reserve’s next policy announcement on November 7th were above 50% a week ago, but the expectations for a massive 50 basis point (bp) rate cut in the Federal Reserve’s next policy announcement on November 7th were above 50% a week ago. completely disappeared.
According to CME Group’s FedWatch tool, traders currently say there is a 96% chance of a quarter-point rate cut, with a low chance of the policy rate remaining unchanged.
“Suddenly, the idea of U.S. economic exceptionalism is back in vogue,” said senior researcher Michael Brown, with some traders betting on a quarter-point rate cut at the Fed’s two remaining policy meetings this year. He said he seemed to have doubts about even the idea of doing it twice. Strategist at Pepperstone.
“Employment data suggests an unexpectedly strong employment situation and consumer spending should remain supported, with the outlook for a soft landing remaining,” Brown said.
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But he still expects a 50 basis point rate cut by the end of the year, despite the “enthusiastic nature of sentiment at the moment.”
The yield on the 10-year U.S. Treasury note reached 3.992% on Monday for the first time since Aug. 7. The two-year bond yield rose to 3.965%, the highest level since Aug. 22.
This caused regional bond yields to rise, with the 10-year Japanese government bond yield at 0.915%, the highest level since August 6th.
Gold prices fell 0.35% to $2,643 per ounce as the dollar rebounded, but remained not far from last month’s all-time high of $2,685.42.
Oil prices fell after posting their biggest weekly gain in more than a year as the threat of regional war in the Middle East grew.
Brent crude oil futures fell 35 cents to $77.70 a barrel after hitting $79.30 on Friday, the highest since Aug. 30.
U.S. West Texas Intermediate crude oil futures fell 25 cents to $74.13. On Friday, it rose to $75.57, its highest level since August 29th.
(Reporting by Kevin Buckland; Editing by Jamie Freed)
