Asian stock markets posted solid gains on Monday, buoyed by a surprisingly strong U.S. jobs report that signaled continued momentum for the world economy. The data helped narrow expectations for further interest‑rate hikes, allowing investors to focus on growth prospects.
U.S. employment data lifts sentiment
U.S. payrolls rose sharply, reinforcing the view that the labor market remains resilient. Analysts see the numbers as a positive sign for consumer spending and corporate earnings, which in turn lifted confidence in Asian equities.
Oil prices rise amid Gulf tensions
Oil prices ticked higher after the United States and Iran each struck at shipping vessels in the Gulf of Oman. Tehran announced plans to establish a restricted zone outside the Strait of Hormuz in the coming days, following U.S. forces’ attacks on three Iranian tankers and the launch of ballistic missiles at two U.S. Navy ships by Iran’s Islamic Revolutionary Guard Corps.
Brent crude added 0.2%, reaching $96.45 a barrel, while U.S. crude rose 0.4% to $91.85 a barrel. The price increase reflects market concerns over supply disruptions, even as the overall trend this week has been upward.
Implications for central banks
The combination of strong U.S. employment data and higher oil prices has put the spotlight on upcoming inflation readings. A higher consumer‑price index could push the European Central Bank to lift rates to 2.75% on Thursday, with futures indicating a 75% chance of a further hike to 3.0% by December.
In the United States, markets are pricing a 58% chance of a rate increase at the Federal Reserve’s September 16 meeting, and a 70% probability of another move in October. Treasury 10‑year yields are near their highest level since late 2023 at 4.784%, and a strong CPI reading could see yields edge toward the psychological 5.0% barrier.
Asian equity performance
Japan’s Nikkei rebounded 2.0% after a similar decline the previous week, while South Korea’s market rallied 3.0%. The MSCI broadest index of Asia‑Pacific shares outside Japan added 0.9%, reflecting broad‑based optimism across the region.
Rising bond yields continue to weigh on equity valuations, but the positive earnings outlook and the perception of a more stable monetary environment have helped sustain the rally.
Currency and commodity markets
The U.S. dollar index saw only a modest lift from the jobs report, as concerns about growing U.S. debt and policy uncertainty dampened its strength. The dollar stood at 99.135, close to recent lows of 98.558. The euro held at $1.1614, near its August peak of $1.1711. The yen traded at 156.07 per dollar, still testing major support at 155.00 after a 2.4% decline last week.
Gold prices remained steady at $4,426 an ounce after finding support at $4,282 the previous week.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
