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Asian markets rise again after strong US jobs data
NEW YORK, July 9, 2018 (BSS/AFP) – Asian markets rallied on Monday,
extending their gains at the end of last week, following another strong US
jobs report that reinforced confidence in the US economy and helped settle
trade war nerves.
While Friday’s tit-for-tat tariffs on billions of dollars of goods by the
world’s top two economies were seen as damaging, analysts said the the impact
would be limited.
Global markets had been tumbling ahead of the imposition of the tariffs
but bounced on Friday.
The upbeat sentiment carried over into the new week after data showed the
US economy created more than 200,000 jobs in June, beating expectations.
That was compounded by the fact that average hourly earnings growth
remained sluggish, while the unemployment rate edged up, easing pressure on
the Federal Reserve to lift interest rates.
The result helped all three main indexes on Wall Street to end on a high.
And in Asia on Monday Tokyo went into the break 1.3 percent higher, while
Hong Kong and Shanghai were each 1.4 percent up in the morning.
Sydney rose 0.2 percent, Singapore climbed 0.9 percent, Seoul added 0.5
percent and Taipei was more than one percent higher.
However, concerns remain that the trade row between China and the US could
intensify, with Donald Trump threatening hundreds of billions of dollars more
in Chinese goods.
Stephen Innes, head of Asia-Pacific trading at OANDA, said that “should
the (Trump) administration follow through with the threat of a $200 billion-
plus duties on Chinese goods, this would have some negative implication for
both the US and global growth prospects.”
– Sterling rises –
Eyes are now on the release of Chinese trade data later this week.
On currency markets the Chinese yuan edged up against the dollar, having
tumbled in recent weeks on the trade spat.
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While there had been speculation among some observers that Beijing would
allow the unit to weaken in order to offset the impact of a trade war,
authorities stressed they would not weaponise it.
The pound managed to eke out some gains despite Westminster upheaval after
Prime Minister Theresa May’s point man on Brexit negotiations resigned over
the government’s plan to retain strong economic ties with the EU even after
leaving.
“The general direction of policy will leave us in at best a weak
negotiating position, and possibly an inescapable one,” David Davis said in a
letter to May.
His resignation — along with one of his deputies — comes two days after
the cabinet approved the plan in a bid to unblock negotiations with Brussels.
Investors are now preparing for the start of the corporate earnings
season, which analysts said should provide some distraction from the trade
row.
– Key figures around 0300 GMT –
Tokyo – Nikkei 225: UP 1.3 percent at 22,063.74 (break)
Hong Kong – Hang Seng: UP 1.4 percent at 28,720.17
Shanghai – Composite: UP 1.4 percent at 2786.14
Euro/dollar: UP at $1.1752 from $1.1744 at 2030 GMT Friday
Pound/dollar: UP at $1.3300 from $1.3281
Dollar/yen: UP at 110.46 yen from 110.43 yen
Oil – West Texas Intermediate: UP eight cents at $73.88 per barrel
Oil – Brent Crude: UP 14 cents at $77.25 per barrel
New York – Dow: UP 0.4 percent at 24,456.48 (close)
London – FTSE 100: UP 0.2 percent at 7,617.70 (close)
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