Australian stocks hit their highest in more than a year, shares in China gained 0.46% and Japanese shares added 0.91%
Stocks rose on Monday amid speculation that interest rates will remain low due to receding inflationary pressure, while oil and gas prices jumped after a cyber attack on a U.S. pipeline operator unnerved markets. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.35%, while U.S. stock futures rose 0.24%.
Australian stocks hit their highest in more than a year, boosted by gains in miners, and shares in China gained 0.46%. Japanese shares added 0.91%. U.S. nonfarm payrolls data on Friday showed jobs growth unexpectedly slowed in April, which gave equities a lift but put downward pressure on the dollar and U.S. Treasury yields.
Oil and gasoline futures extended gains after a cyber attack shut down a U.S. pipeline operator that provides nearly half of the U.S. east coast’s fuel supply.
It certainly pushes back the timetable for Fed tapering, perhaps to December from the prior expectations of the Jackson Hole Symposium in late August, Chris Weston, head of research at broker Pepperstone in Melbourne, wrote in a memo.
A softer payroll is good for the reflation trade; the dollar weakened across the FX spectrum. We’ve also seen a solid bid in equity indices and futures are up, he stated.
On Friday the Dow Jones Industrial Average (DJIA) and the S&P 500 advanced to record closing highs after disappointing data on the U.S. jobs market eased concerns about a spike in consumer prices.
In recent weeks, some investors had been placing bets that a robust U.S. economic recovery from the pandemic would force the Federal Reserve to raise interest rates earlier than the central bank has outlined. However, the weak nonfarm payrolls report caused a rapid reversal in some of these trades, which rippled through stocks, bonds, and major currencies.
The focus now shifts to U.S. consumer price data due on Wednesday, which will help investors determine whether they need to scale back their inflation expectations even further. MSCI’s broadest index of global stock markets hit a record high on expectations that low rates will continue to spur lending and economic growth.
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