(Bloomberg) — Asian stock markets were on track for early gains after stocks and bonds rose on Wall Street on Thursday ahead of key U.S. jobs data due later Friday.
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Stock futures in Australia and Hong Kong edged higher as the S&P 500 rose 0.9% and the tech-heavy Nasdaq 100 rose 1.3%. Markets in Japan and mainland China will be closed on Fridays for public holidays.
The rally in U.S. tech companies continued late after Apple Inc.'s better-than-expected results, with the iPhone maker also raising its dividend and announcing a $110 billion share buyback. The company's shares rose more than 6% in post-market trading after rising modestly during regular hours, a rally that underpinned gains in U.S. futures early Friday.
U.S. Treasuries rose above the curve on Thursday. The 10-year Treasury yield fell 5 basis points to 4.58%, while the policy-sensitive 2-year yield fell 9 basis points. Government bond trading in Asia will be closed due to a Japanese holiday.
On Thursday, the dollar index suffered its steepest decline since December, while the yen rose to its highest level in nearly three weeks against the dollar.
The move came ahead of Friday's release of nonfarm payrolls numbers, which will help clarify the future direction of Federal Reserve policy. Economists surveyed by Bloomberg expect payrolls to rise by 240,000, which would be the slowest pace since November.
The Federal Reserve decided on Wednesday to keep its benchmark interest rate target range unchanged at 5.25% to 5.5%, citing a slew of data suggesting lingering price pressures. But Chairman Jerome Powell said it was unlikely the Fed's next action would be to raise rates.
“The Fed appears to have all but eliminated the possibility of raising rates, but they have also made clear that they intend to keep rates high for an extended period of time,” said Chris Larkin of Morgan Stanley's E-Trade. “Markets will be hungry for any data that suggests the economy is no hotter than it was in the first quarter,” he said.
According to a survey conducted by 22V Research, 30% of investors surveyed believe Friday's jobs report will be a “risk-on” response, while 27% expected a “risk-off” reaction and 43% expected a “risk-off” reaction. answered, “Very mixed/can be ignored.” The aggregated results revealed that among labor indicators, investors pay the most attention to average hourly wages.
“The market is still likely to react more to weak indicators than to strong indicators as investors become increasingly hawkish,” said Oscar Muñoz and Gennady Goldberg of TD Securities. “However, the recent series of upside surprises in economic data are unlikely to last long as expectations continue to be reset higher again.”
The options market is predicting big swings in stock prices after Friday's U.S. jobs report, with traders expecting more clarity on how much the Fed will cut interest rates this year.
Based on the cost of at-the-money puts and calls expiring on Friday, the S&P 500 index moved 1.1 in either direction after the announcement, said Stuart Kaiser, head of U.S. equity trading strategy at Citigroup. It is expected to move by 2%. The figure, based on the S&P straddle price as of Wednesday's close, is the largest implied change before the jobs report since March 2023, he said.
After the Fed's decision to hold interest rates on Wednesday, the current rate suspension period reaches 280 days, which remains the second-longest in history, according to Ryan Grabinski of Strategas Securities.
“A long hiatus is good for stocks,” Grabinski said. “From June 2006 to September 2007, the longest period of hiatus was associated with the highest returns in the stock market. A Fed rate cut likely means a deepening of the problem. is reaching.”
In Asia, data to be released includes inflation in Thailand and retail sales in Hong Kong and Singapore.
Oil rose slightly early Friday after the previous close, but was little changed. Gold prices were also flat early Friday morning at around $2,305 an ounce.
This week's main events:
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Eurozone unemployment rate, Friday
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US unemployment rate, non-farm payrolls, ISM services, Friday
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Chicago Fed President Austan Goolsby speaks on Friday
This week's main events:
-
Eurozone unemployment rate, Friday
-
US unemployment rate, non-farm payrolls, ISM services, Friday
-
Chicago Fed President Austan Goolsby speaks on Friday
The main movements in the market are:
stock
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As of 7:29 a.m. Tokyo time, S&P 500 futures were up 0.3%.
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Hang Seng futures rose 2%
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S&P/ASX 200 futures up 0.5%
currency
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The Bloomberg Dollar Spot Index fell 0.7%.
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The euro was almost unchanged at $1.0729.
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The Japanese yen rose 0.1% to 153.41 yen to the dollar.
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The offshore yuan was almost unchanged at 7.2060 yuan to the dollar.
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The Australian dollar was almost unchanged at US$0.6568.
cryptocurrency
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Bitcoin rises 1% to $59,306.16
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Ether rose 0.6% to $3,003.61
merchandise
This article was produced in partnership with Bloomberg Automation.
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