Asian shares rose before a monthly US payrolls report forecast to show employers slowed hiring month, potentially easing pressure on the Federal Reserve to raise interest rates again.
Equity benchmarks in Australia, Japan, South Korea and Hong Kong all climbed. A region-wide share gauge headed for its second daily advance, which would mark the first back-to-back gain in three weeks. The Hang Seng Index jumped as much as 2.3%, but is still set for a fifth week of losses. Chinese markets remain shut for a week-long holiday.
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“The US dollar has weakened against a basket of currencies, oil has pulled back sharply and a number of Asian companies have reported positive earnings in recent days,” said Manish Bhargava, a fund manager for Straights Investment Holdings in Singapore. “This could be boosting sentiment in the region.”
The nonfarm payrolls report will show US employers hired 170,000 workers last month, down from 187,000 in August, a Bloomberg survey showed. Job data earlier this week provided a discordant narrative: job-openings overshot estimates, while a measure of private employment from ADP was weaker than forecast.
“There may be a few more hikes to come but we are definitely reaching the end” of the cycle, Thu Ha Chow, head of fixed income for Asia at Robeco in Singapore, said on Bloomberg Television. “We’ve got through this year without a very big crack in the US economy, and I think that should give other central banks some confidence” in addressing above-target inflation, she said.
US equity futures were little changed after the S&P 500 fell 0.1% Thursday, while the tech-heavy Nasdaq 100 slipped 0.4%, though both were well off their lows.
Hong Kong stocks were boosted by optimism that southbound flows and Golden Week consumption trends may aid China shares when mainland markets reopen. E-commerce and other consumer-related companies and financial stocks contributed the most to the gauge’s rally.
News that a Chinese iron-ore buying agency was in talks with global miners supported shares in BHP Group Limited and Fortescue Metals Group Ltd.
Treasuries were little changed with the 10-year yield holding at 4.72%, down from a high of 4.88% set on Wednesday.
“Friday’s payrolls data, and next week’s inflation number, will decide whether the 10-year Treasury yield goes up to 5% or down to 4.5%,” said Kenneth Broux, a strategist at Societe Generale in London. A higher-than-forecast jobs number may trigger “another wave of dollar-buying and bond-selling,” he said.
Major currencies traded in narrow ranges. The yen edged lower even as former Bank of Japan official Kazuo Momma, currently executive economist at Mizuho Research & Technologies, said the central bank would likely discuss whether to tweak forward guidance and yield curve control when they meet this month.
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Indian bonds fell after the central bank kept interest rates unchanged and said it may have to consider making some open-market-operation sales in the future.
Traders have record sums riding on the outcome of November’s Fed meeting as investors and policymakers debate the likelihood of a further rate increase this year. San Francisco Fed President Mary Daly, who doesn’t vote on the Fed’s rate-setting committee this year, said the central bank may keep rates on hold if inflation and the jobs market cool.
The International Monetary Fund now sees higher odds of the global economy averting recession, according to Managing Director Kristalina Georgieva. Still, the fund warned that growth remains uneven and weaker than it was before the pandemic.
In commodities, oil edged higher after a Thursday decline on concern slowing global growth will hit demand. Goldman Sachs Group Inc. predicts the decline will be fleeting. Gold steadied after a run of declines, while Bitcoin traded around $27,500.
Key events this week:
- China has week-long holiday
- Germany factory orders, Friday
- US unemployment rate, nonfarm payrolls, Friday
Some of the main moves in markets:
- S&P 500 futures were little changed as of 1:47 p.m. Tokyo time. The S&P 500 fell 0.1%
- Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.4%
- Japan’s Topix rose 0.3%
- Australia’s S&P/ASX 200 rose 0.5%
- Hong Kong’s Hang Seng rose 1.8%
- Euro Stoxx 50 futures rose 0.4%
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0543
- The Japanese yen fell 0.1% to 148.72 per dollar
- The offshore yuan was little changed at 7.3108 per dollar
- Bitcoin rose 0.2% to $27 521.2
- Ether rose 0.4% to $1 622.59
- The yield on 10-year Treasuries was little changed at 4.71%
- Japan’s 10-year yield was unchanged at 0.795%
- Australia’s 10-year yield declined two basis points to 4.55%
- West Texas Intermediate crude rose 0.2% to $82.50 a barrel
- Spot gold rose 0.2% to $1,823.38 an ounce
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