Asian Stocks Eye Positive Start as China Returns: Markets Wrap – Yahoo Finance

May 5, 2024

(Bloomberg) — Asian stock markets are firm as China returns from a three-day holiday and Friday’s weaker-than-expected U.S. jobs report rekindles expectations that the U.S. Federal Reserve will cut interest rates this year. We are paying attention to the approach.

Most Read Articles on Bloomberg

U.S. stock futures rose modestly in early trading after the S&P 500 rose 1.3% in pre-market trading, but Australian and Hong Kong contracts showed gains on Monday. A benchmark for Chinese stocks listed on the Nasdaq rose 5.5% last week, indicating a start to solid trading once mainland markets reopen. Japanese markets are closed due to holidays.

The positive sentiment came after global stocks rose for the second consecutive week. U.S. Treasuries rallied after Friday’s payroll release, placating investors worried about “stagflation” and a recession as wages cooled. Rather, the print feed fed those who believe the economy is gradually slowing, which will allow the data-dependent Fed to begin easing policy later this year. Australian and New Zealand bonds also rose on Monday.

Last week, a series of weaker-than-expected data from jobs to services to manufacturing pushed Citigroup’s U.S. Economic Surprise Index to its lowest level since February 2023. This metric measures the difference between actual announcements and analyst expectations. Nonfarm payrolls rose by 175,000 in April, the slowest increase in six months.

“Markets are becoming increasingly confident that the U.S. economy is not actually overheating,” said Chris Weston, head of research at Pepperstone Group in Melbourne. “Although the level of convictions may still be low, the foundations are in place for risk assets to rise this week, especially if ceasefire negotiations in Gaza take off in earnest.”

Oil prices rose in early trading on Sunday after Israel closed its Kerem Shalom humanitarian border to Gaza following a Hamas rocket attack. The incident threatened to derail weeks of delicate hostage-taking and ceasefire negotiations. Saudi Arabia has raised the price of crude oil sold to Asia as it seeks to tighten the oil market.

Traders will also be watching this week’s series of central bank meetings, led by the Reserve Bank of Australia, which is likely to turn hawkish on Tuesday following better-than-expected inflation data last month. Also scheduled to be released are activity data from China and inflation rates for major emerging markets.

This week’s main events: