Talking Points
- Most Asian stocks were in the green as a new week got under way
- Local data were mixed but there were plenty of bright spots
- The US Dollar made modest gains
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Most Asian stocks managed gains Monday as local investors got their first chance to react to last week’s strong US employment figures.
The Nikkei gained 0.9% with most other bourses comfortably in the green. Shanghai was the exception as markets moved into the close, but even that wasn’t down by more than 0.1%
The US Dollar has been boosted – a sight which usually cheers the region’s exporters- as global markets move to price in more monetary tightening from the US Federal Reserve.
Local economic numbers were mixed. The day started with news that Japan’s Prime Minister Shinzo Abe was facing his lowest ever approval ratings. Then came Balance of payment and machine order data out of Japan. They were quite mixed, with the latter falling really hard- although it is a volatile series. The monthly “Economy Watchers” survey was a little more upbeat for June. Assessments of both current conditions and the outlook better than they had been in May. Bank of Japan Governor Hirohikp Kuroda kept his tone very dovish when he spoke in Tokyo.
Meanwhile official Chinese inflation numbers offered the markets few surprises, coming in as expected as food prices slackened.
The US Dollar was firm thanks to those payroll data. It chalked up its highest point since May 11 against the Yen, peaking out at 114.21. The Euro didn’t get any obvious boost from a higher-than-expected May German trade surplus of EUR22 billion (US$25.08 billion).
Crude oil prices recovered a little poise after last week’s strong falls but the prospect of plentiful supply from the US and more traditional producers still caps the market. There will be more headlines for oil-watchers this week as the World Petroleum Congress gets under way in Turkey. Gold prices inched lower for much of the Asian session as the greenback steadied and stocks held up.
It’s a quiet Monday for scheduled economic news with only the US Labor Market Conditions Index likely to grab investors’ attention.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
