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Asian markets track record lead from Wall Street, focus on jobs
HONG KONG, July 4, 2019 (BSS/AFP) – Asian markets rose Thursday, tracking a
record performance on Wall Street, as investors turned their focus to the
upcoming release of US jobs data while hoping for a big Federal Reserve
interest rate cut.
US traders went on a pre-July 4 spending spree Wednesday to push all three
main indexes to their all-time highs as a string of weak economic indicators
reinforced the case for the Fed to reduce borrowing costs.
With the relief-rally from Donald Trump and Xi Jinping’s trade war
ceasefire running its course, dealers were turning their attention to the
global outlook and pinning their hopes on central bank support.
The release Friday of US non-farm payroll figures is key, analysts say,
with a weak reading likely to reinforce expectations of a rate cut.
Talk of a reduction and concerns about the economy have seen the yield on
safe haven 10-year Treasuries fall below two percent
“A lot of US economic data is wavering, as most key indicators are falling
below trend, but the recent standouts have been labour and wage data,” said
OANDA senior market analyst Edward Moya.
“If the pillars of the economy begin to show some signs of weakness, this
will disrupt the US consumer and support the calls for the Fed to cut in July
and signal an additional one is on the way.”
– Dollar dips –
In early Asian business, Hong Kong was up 0.5 percent, Shanghai added 0.1
percent, Tokyo climbed 0.3 percent by the break and Sydney jumped 0.6
percent.
Singapore was up 0.3 percent, Wellington added 0.2 percent and Taipei was
0.4 percent stronger though Seoul was marginally lower.
Stephen Innes, at Vanguard Markets, said the fall in yields across several
asset classes “has increased investor appetite for high dividend-yielding
equity risk”.
Investors were “hoping that this next wave central bank monetary infusion
will provide a foundation to ensure the global cyclical bottom is set while
offering a welcoming climate to extend this bullish trading cycle,” he said.
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The increasing likelihood of a Fed cut weighed on the dollar, with riskier
currencies such as the South Korean won, Australian dollar and Indonesian
rupiah all strengthening.
The Chinese yuan was also slightly higher.
However, Trump hit out at China on Wednesday in a Twitter rant, accusing it
and Europe of artificially keeping the yuan and euro weak to gain an
advantage over the US.
He said they were playing a “big currency manipulation game” and “pumping
money into their system”, adding that the US should step up to the fight by
matching them.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 0.3 percent at 21,699.93 (break)
Hong Kong – Hang Seng: UP 0.5 percent at 28,993.91
Shanghai – Composite: UP 0.1 percent at 3,018.08
Euro/dollar: DOWN at $1.1290 from $1.1280 at 2100 GMT
Dollar/yen: DOWN at 107.75 yen from 107.81
Pound/dollar: UP at $1.2586 from $1.2576
West Texas Intermediate: DOWN 38 cents at $56.96 per barrel
Brent North Sea crude: DOWN 45 cents at $63.37 per barrel
New York – Dow: UP 0.7 percent at 26,966.00 (close)
London – FTSE 100: UP 0.7 percent at 7,609.32 (close)
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