SYDNEY, RAW – Asian shares have edged higher, looking to extend their recent rally to a third week should US jobs figures show the expected revival in hiring in May and keep the global recovery on track.
MSCI’s broadest index of Asia-Pacific shares outside Japan was a fraction firmer on Monday, having rallied 2.2 per cent last week. Japan’s Nikkei was flat, while Australia rose 0.2 per cent to a fresh record peak.
Markets in the US and UK are closed for a holiday, but futures were still trading in Asia with the Nasdaq up 0.2 per cent and S&P 500 ahead by 0.1 per cent.
The main event of the week will be US payrolls on Friday, with median forecasts at 650,000 but the outcome uncertain following April’s shockingly weak 266,000 gain.
That April figure was close to 750,000 lower than forecasts, the largest “miss” in the history of the series.
The Federal Reserve next meets on June 16 and this week will be the last chance for members to talk on policy before the blackout period starts on June 5.
So far, investors have taken the Fed at its word that the labour market needs to improve a lot more before it talks of tapering. That helped yields on US 10-year notes ease to 1.58 per cent on Friday even as data on core inflation topped forecasts.
The dollar index stood at 90.062, near a five-month low. The euro was steady at $US1.2190, just off a four-month high of $US1.2266 hit last week.
The dollar has fared better on the Japanese yen as investors borrow the currency at super-low rates to buy higher-yielding assets. The dollar was last at 109.93 yen after touching a two-month top of 110.19 last week.
China’s yuan has gained 1.7 per cent so far in May to trade at three-year highs and breach the psychologically important 6.4 per dollar level.
Concerns about global inflation and extreme volatility in cryptocurrencies has been a boon for gold which was holding at $US1,903 after hitting a four-month high at $US1,1912 last week.
Oil prices were firm after gaining more than five per cent last week to reach two-year closing highs as expectations of a rebound in global demand outweighed concerns about more supply from Iran once sanctions are lifted.
All eyes will be OPEC this week as it reviews its supply agreement, and any hint of an increase in output could pressure prices.
Brent added 21 cents to $US68.93 a barrel, while US crude rose 26 cents to $US66.58.