(Bloomberg) — Asian shares tracked Wall Street’s gains on dovish signs from central banks, with focus on US jobs data due later Friday. The yen’s rally slowed.
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Stocks rose from Australia to Japan and Hong Kong, pushing a regional gauge up for a third day. Mainland Chinese shares fluctuated. The broader rally came after the S&P 500 Index set a record and the tech-heavy Nasdaq 100 jumped 1.6% Thursday. US futures were slightly lower in Asian trading.
The yen pared some its gains but remained higher versus the dollar, following Thursday’s rally that placed the Japanese currency around the strongest level since early February. Expectations have grown for the Bank of Japan to raise interest rates for the first time since 2007.
The strength in stocks came after Federal Reserve Chair Jerome Powell told a Senate committee Thursday that the central bank is “not far” from confidence needed to ease policy. He said rate reductions “can and will begin” this year, adding that policymakers are well aware of the risks of cutting too late. Meantime, European Central Bank President Christine Lagarde indicated that officials may be in a position to loosen policy in June.
Treasuries steadied after yields dropped across the curve Thursday. A dollar index was slightly weaker Friday.
All eyes are on Friday’s key US employment data. The consensus forecast places the number of new jobs added to the US economy at 200,000. However, a dispersion in expectations could trigger volatile trading when the final print is released. For instance, RBC Capital Markets LLC expects 260,000 jobs, while Citigroup Inc predicts 145,000.
“Friday’s jobs data could be a wild one,” said Andrew Brenner, head of international fixed income for Natalliance Securities LLC. A wide range of forecasts means the 10-year yield could swing dramatically, he said. “If the number is really good we could be looking at a 3 handle for the 10-year, but if it’s bad then 4.3% could be in the cards,” he said.
Gina Bolvin, president of Bolvin Wealth Management Group, bets the most important item in Friday’s report will indeed be wages — and if they are climbing too quickly. If they are moving up too fast, companies will pass this cost to the end user which is inflationary, she noted.
“The markets have declined on inflationary data, however it has recovered quickly,” Bolvin added. “It’s a constant buy-the-dip mentality mostly because earnings growth and estimates have been strong.”
Elsewhere, Hong Kong proposed life sentences for crimes related to treason and insurrection in a draft security measure officials are seeking to fast-track into legislation.
Oil inched higher Friday after falling in the previous session as traders weighed the outlook for interest rates and tumult in the Middle East. Gold retreated after a record-breaking rally.
Key Events This Week:
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Eurozone GDP, Friday
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US nonfarm payrolls, unemployment, Friday
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New York Fed President John Williams speaks, Friday
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ECB Governing Council member Robert Holzmann speaks, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures were little changed as of 11:23 a.m. Tokyo time
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Nasdaq 100 futures fell 0.3%
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Japan’s Topix rose 0.6%
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Australia’s S&P/ASX 200 rose 0.8%
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Hong Kong’s Hang Seng rose 1%
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The Shanghai Composite fell 0.1%
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Euro Stoxx 50 futures rose 0.1%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0949
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The Japanese yen was little changed at 147.98 per dollar
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The offshore yuan was little changed at 7.2020 per dollar
Cryptocurrencies
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Bitcoin fell 0.3% to $67,109.6
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Ether rose 1.1% to $3,918.81
Bonds
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The yield on 10-year Treasuries advanced one basis point to 4.09%
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Japan’s 10-year yield was little changed at 0.735%
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Australia’s 10-year yield was little changed at 4.00%
Commodities
This story was produced with the assistance of Bloomberg Automation.
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