(Bloomberg) — Stocks in Asia gained Monday and Treasury yields fell back as investors assessed the Federal Reserve’s policy path to control inflation.
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Shares advanced at open in Japan and South Korea, while contracts for the S&P 500 climbed 0.1% after small gains for futures when the nonfarm payrolls figures were released Friday. Trading of Hong Kong stocks and Australian equities and bonds are shut for Easter holidays.
Treasury yields dropped across the curve in Asia after jumping Friday following the release of US jobs report. The data supported bets for another Fed rate increase to quell inflation, while also easing some concerns the US economy is careening toward recession.
Major currencies held in narrow ranges, with the dollar’s moves against Group-of-10 currencies was confined to about 0.1% Monday.
Oil advanced, with West Texas Intermediate near the highest since January as traders assessed challenges to supply in the wake of the unexpected output cut by OPEC+. Gold inched lower and cryptocurrencies were little changed.
Chinese military drills around Taiwan, following the island’s president visiting the US, may add to the sense of caution in Asian markets. Easter holidays will also keep trading shuttered Monday in Hong Kong, Australia and New Zealand, along with most of Europe.
“March’s NFP report delivered only a half-victory for the market but effectively reminded Fed of its undone job,” said Hebe Chen, an analyst at IG Markets Ltd. “The ‘glass half-full’ sentiment is poised to bake into a more divided and fragile risk appetite.”
US payrolls rose at a robust pace in March of 236,000, which was in line with forecasts and followed an upwardly revised 326,000 advance in February. The unemployment rate dropped again to near record lows to 3.5%.
Swaps trading showed the odds for a quarter percentage point interest-rate increase at the Fed’s May meeting rose to about two in three, up from roughly 50-50 before the data landed. Investors have been aggressively pricing in rate cuts later this year as economic data falls short of estimates, suggesting the American economy is slowing.
“In the short term we are not expecting any surprises for Asian equities over the coming week, unless something major changes the landscape,” said Peter McGuire, chief executive officer of Trading Point. “Markets remain cautious due to central bank’s policy and inflation. There certainly could be trouble brewing in the not-to-distant future as layoffs and earnings will show us all who has no clothes when the tide runs out.”
The next major data point for the Fed is a report on consumer prices, due April 12. Officials deliver their policy move on May 3.
Key events this week:
US wholesale inventories, Monday
New York Fed President John Williams takes part in discussion hosted by the Economics Review at New York University, Monday
China PPI, CPI, Tuesday
IMF world economic outlook, global financial stability reports, Tuesday
Chicago Fed’s Austan Goolsbee, Minneapolis Fed’s Neel Kashkari and Philadelphia Fed’s Patrick Harker speak at separate events, Tuesday
Canada rate decision, Wednesday
US FOMC minutes, CPI, Wednesday
Richmond Fed’s Thomas Barkin speaks, Wednesday
China trade, Thursday
US PPI, initial jobless claim, Thursday
US retail sales, business inventories, industrial production, University of Michigan consumer sentiment, Friday
Major US banks JPMorgan Chase, Wells Fargo and Citigroup report earnings, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% as of 9:08 a.m. Tokyo time
Nasdaq 100 futures were little changed
Japan’s Topix index rose 0.8%
South Korea’s Kospi index rose 0.6%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0913
The Japanese yen was little changed at 132.27 per dollar
The offshore yuan was little changed at 6.8766 per dollar
The Australian dollar was little changed at $0.6672
Cryptocurrencies
Bitcoin rose 0.8% to $28,364.63
Ether rose 0.2% to $1,861.45
Bonds
Commodities
West Texas Intermediate crude rose 0.4% to $81 a barrel
Spot gold fell 0.2% to $2,003.51 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee, Abhishek Vishnoi, Katie Greifeld and Liz Capo McCormick.
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Source: https://finance.yahoo.com/news/currencies-tight-ranges-us-futures-223339208.html