Asian Stocks Gain As US Jobs Blockbuster Puts Fed Hikes In Focus
ASIAN STOCKS TALKING POINTS:
- Asian stocks rose across the board
- The US Dollar was supported anew by good economic news from its homeland
- The Australian Dollar market looked to the Reserve Bank
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Asian stocks rose on Monday, apparently reacting to last week’s very strong US employment data.
The world’s largest economy added a chunky 232,000 nonfarm jobs in April, taking the unemployment rate down to an 18-year low. Wage pressures were also seen to increase, a fact which for many in the markets seems to have nailed down a June interest rate rise from the Federal Reserve.
Wall Street had understandably cheered this news on Friday, Monday brought Asia’s turn. The Nikkei 225 was up 1.3% in the Tokyo afternoon, with all other major markets around the region higher too. The Hang Seng added more than 1%, with the ASX and Shanghai Composite in the green to the tune of 0.5% or so.
Markets managed to shrug off ongoing trade concerns, despite the latest US sanctions and increasing worries about the cohesion of NAFTA- the North American Free Trade Area. The indexes probably remain vulnerable to trade headlines, however, so keep an eye out.
The US Dollar caught a tailwind from those Fed-hike expectations, one it retained through the Asian session. Its Australian cousin failed to move much on some strong second-tier economic data. Investors remain focused on the Reserve Bank of Australia which will give its June monetary policy decision on Tuesday- no change is expected to the Official Cash Rate’s now venerable 1.5% record low.
AUD/USD remains stuck in a broad trading range, one which seems unlikely to break to the upside unless the RBA sounds a more hawkish note, or Australian growth data pleases the crowds on Wednesday- the latter seems more likely at present.
US durable goods orders are likely to be the data highlight of the remainder of Monday.
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--- Written by David Cottle, DailyFX Research
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.