Asian stocks strengthened on Monday as the dollar fluctuated after the anxiously awaited May report in the US Gazette showed a recovery in the right direction, but not so hot that it could lead to a policy shrinking from the Federal Reserve.
Investors were curious to see how the shares of the big technology companies would react to the G7 agreement on a minimum global corporate tax rate of at least 1
So far, the reaction has been muffled with both the Nasdaq futures and the S&P 500, slightly modified.
Of interest will also be the quarrel over US President Joe Biden’s $ 1.7 trillion infrastructure plan, with the White House rejecting the latest Republican proposal. Read more
MSCI’s broadest Asia-Pacific equity index outside Japan (.MIAPJ0000PUS) added 0.3% and seemed to break three session losses. Japan’s Nikkei (.N225) rose 1.0% to its highest level in almost a month, while South Korea (.KS11) gained 0.7%.
While US wage growth of 559,000 missed forecasts, it was still a great relief after the shockingly weak April report, while the 5.8% unemployment rate showed that there is still a long way to go to meet the Fed’s full employment target. . Read more
“The data was perfect for the prospects for goldfinch at risk: not too hot to raise concerns about a faster Fed thinning, and not too cold to worry about recovery prospects,” said NatWest Markets strategist John Briggs.
“This has led to weaker US dollars, better stocks, strengthened the earlier supply of raw materials and boosted emerging markets.”
The focus will now be on the US consumer price report on Thursday, where the risk is higher, although the Fed still says the jump is transient.
Briggs suspects that Fed officials may open the door to talks to reduce the political session in June, starting in early 2022 and raising interest rates only in 2024.
The European Central Bank is holding its political meeting on Thursday and is expected to maintain its stimulus measures by reducing the long-term perspective.
Yields on 10-year US banknotes were slightly higher at 1.567% after diving 7 basis points on Friday and returning to the bottom of trading volume in the last three months.
This decline, combined with improved risk appetite, put the dollar on the defensive. It was last at 90,100 against a basket of currencies after slipping from a peak of 90,629 on Friday.
The euro remained at $ 1.2170 after rebounding from a low of $ 1.2102 on Friday, while the dollar returned to 109.52 yen from a peak of 110.33.
The dollar retreat helped keep gold steady at $ 1,890 an ounce, rising to a low of $ 1,855 on Friday.
Oil prices calmed after Brent reached $ 72 a barrel last week for the first time since 2019, as OPEC + supply discipline and demand recovery countered concerns about the uneven distribution of COVID-19 vaccination.
Brent rose 6 cents to $ 71.92 a barrel, while US crude added 9 cents to $ 69.71 a barrel.
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