4min read
PREVIOUS ARTICLE Manufacturing strongest in thr... NEXT ARTICLE Pace of house price rises slow...
  • SYDNEY, RAW – Asian share markets were off to a slow start as holidays in China and Japan crimped volumes and investors awaited a raft of data which should show the US leading a global economic recovery.

    MSCI’s broadest index of Asia-Pacific shares outside Japan was all but flat on Monday morning after taking a bit of a spill on Friday.

    Japan’s Nikkei was shut for a holiday but Nikkei futures edged up 0.2 per cent.

    Wall Street extended its bull run with Nasdaq futures and S&P 500 futures up 0.3 per cent.

    A busy week for US economic data is expected to show resounding strength, particularly for the ISM manufacturing survey and April payrolls.

    Forecasts are that 978,000 jobs were created in the month as consumers their spent stimulus money and the economy opened up more.

    Such gains could stir speculation of a tapering in asset purchases by the Federal Reserve, though Chair Jerome Powell has shown every sign of staying patient on policy.

    “Payrolls should show another near one million jobs gain but that would still leave them 7.5 million below pre-COVID levels,” said Tapas Strickland at NAB.

    “Chair Powell recently noted it would take a string of months of job creation of about a million a month to achieve the substantial progress required to justify tapering QE.”

    Powell was due to speak later on Monday and be followed by a raft of Fed officials this week.

    Dallas Fed President Robert Kaplan caused a stir on Friday by calling for beginning the conversation about tapering.

    Powell’s patience has helped limit selling pressure in Treasuries, yet 10-year yields still ended last week with a rise of 6 basis points to be last at 1.626 per cent.

    The rise offered some support to the US dollar which has been pressured by the rapid budget expansion and trade deficits, a by-product of the economy’s outperformance.

    The dollar index stood at 91.253 and off a two-month trough of 90.422, though it still ended April with a loss of 2 per cent.

    The euro was steady at $1.2026, having backtracked form a nine-week peak of $1.2149 on Friday.

    It now has solid support around $1.1990.

    The dollar has fared better on the yen at 109.29, well above its recent low of 107.46.

    In commodity markets, gold held to a narrow range around $US1768 an ounce sidelined in part by investor interest in crypto currencies as an alternative hedge against inflation.

    Ether hit a record high on Monday, within a whisker of $US3000 and extending last week’s rally in the wake of a report the European Investment Bank could launch a digital bond sale on the ethereum blockchain network.

    Oil prices ran into profit-taking on Friday but still ended the month with gains of 6-8 per cent.

    Brent was last up 16 cents at $US66.92 a barrel, while US crude firmed 18 cents to $US63.76 per barrel.