(Bloomberg) — Asian stocks rose after stronger-than-expected US jobs data underscored the health of the world’s largest economy and boosted optimism over a soft landing.
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Australian and Japanese share markets both gained, after the S&P 500 and Treasury yields rose on Friday amid recalibrated bets on the size of the Federal Reserve’s next interest-rate cut. The yield on 10-year Treasuries advanced one basis point Monday.
Trading is being shaped by expectations of US economic resilience, after US employers added the most jobs in six months. Wagers on a no-recession scenario stand to boost the dollar while triggering a drop in haven assets.
“Tailwinds into Asia are probably more significant than anywhere else in the world” with the Goldilocks US economy and fresh Chinese stimulus, said Kyle Rodda, a senior analyst at Capital.com. “This is a very opportune time to reallocate to Asia given the fact there are signs of clear economic strength and therefore outperformance in cyclical sectors of which Asia is heavily weighted towards.”
Traders will soon shift to preparing for China’s reopening on Tuesday after stimulus measures announced prior to the Golden Week holiday lifted the Hang Seng Index to the highest since March 2022. Officials from the National Development and Reform Commission will host a briefing on implementing incremental economic policies.
“The market will be keen to hear substance that could result in animal spirits, demand and consumption ramping up,” Chris Weston, head of research at Pepperstone Group said of the NDC meeting. “It’s hard to put into context the rally we’ve seen in these equity indices” and all have found strong buying support on the slightest pullback, he said.
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 in early trading 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
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S&P 500 futures were little changed as of 9:07 a.m. Tokyo time
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Hang Seng futures fell 1%
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Japan’s Topix rose 1.6%
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Australia’s S&P/ASX 200 rose 0.1%
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Euro Stoxx 50 futures rose 0.9%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0971
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The Japanese yen was little changed at 148.74 per dollar
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The offshore yuan was little changed at 7.0996 per dollar
Cryptocurrencies
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Bitcoin rose 0.4% to $62,869.07
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Ether rose 0.3% to $2,444.9
Bonds
Commodities
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West Texas Intermediate crude fell 0.6% to $73.92 a barrel
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Spot gold fell 0.2% to $2,649.14 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess.
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