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Asia markets, dollar rally after US jobs data

Jul 10 2017 13:45

Hong Kong - Asian markets mostly rose on Monday and the dollar built on gains, following a rally on Wall Street that came on the back of forecast-busting jobs data out of the United States.

All three main indexes in New York surged on Friday after the Labour Department said the world's top economy created almost 50 000 more jobs than expected in June, reinforcing the view that it is back on track.

While there was disappointment at another weak reading on wage growth, analysts said the news was greeted with open arms by dealers after a tough week on trading floors caused by geopolitical tensions following North Korea's latest missile test.

"The non-farm payroll figures exceeded expectations and boosted risk appetite among investors," said Milan Cutkovic, market analyst at AxiTrader.

Asian investors tracked their US counterparts. Tokyo ended 0.8% higher, while Sydney jumped 0.4%.

Hong Kong also rose 0.6% with Wanda Hotel Development soaring almost 50% after its parent said it would sell dozens of hotels and other projects to developer Sunac China Holdings in a US$9.3bn deal to reduce debt.

Also in Hong Kong state-run Cosco Shipping jumped 5.4% on news it would pay US$6.3bn for Orient Overseas International, creating a global shipping titan. Orient soared 20%.

Singapore added 0.5% and Seoul gained 0.1%. But Shanghai eased 0.2% with traders unimpressed by data showing Chinese inflation stabilised in June after slowing for three months.
There were also losses in Taipei and Wellington.

On currency markets the greenback pushed on, having been boosted by last week's jobs numbers, which fuelled expectations the Federal Reserve will lift interest rates at least once more before year's end.

Trump isolated

Fed boss Janet Yellen will appear this week in her twice-annual testimony to Congress, which will be pored over for clues about its rate plan as well as the winding down of a bond-buying programme put in place during the financial crisis.

The greenback was above ¥114, with the Japanese unit also weighed by expectations the country's central bank will not likely tighten monetary policy any time soon as the economy struggles to get up to speed.

"The BoJ appears left alone on easing while other major central banks are looking to exit strategies," Masakazu Satou, senior analyst at Gaitame Online, said.

"The yen selling pressure is expected to continue for now due to the difference in interest rates," he told AFP.

The dollar also held most of its gains on the pound.

There was little reaction to the weekend communique from the G20, where leaders made concessions on trade and climate language to Donald Trump after a fractious gathering that saw the US leader isolated.

Dealers had been worried about the tycoon, who has embarked on a nationalist "America First" agenda that has raised eyebrows around the world. There was also little movement between powers on the North Korea crisis.

"The market was concerned that Trump may start a trade war soon. But at least he didn't mention it at the latest G20 meeting," Cutkovic said.

Oil prices rose after plunging Friday on worries about rising US supplies, with companies adding more rigs to lift output.

In early European trade London jumped 0.4%, Paris gained 0.3% and Frankfurt was 0.6% higher.

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