Asia-Pacific financial markets have been largely higher on Thursday, as investors await the release of the U.S. unemployment report later this week for clues on how long the Fed will remain on hold. After being closed for public holidays, Japanese markets reopened this week for the first time. The Nikkei 225 index gained 1.98 percent, while the Topix index gained 1.97 percent. The Kospi in South Korea, which was also closed in the previous session, rose 0.7 percent. Hong Kong’s Hang Seng index rose 1.15 percent. After being closed for public holidays, Chinese mainland shares exchanged for the first time in May. The Shanghai composite increased 0.21 percent, while the Shenzhen portion fell 0.87 percent. Meanwhile, Australia’s ASX 200 fell nearly 0.6 percent, with most industries down. Thursday’s session in Asia-Pacific comes after a mixed finish on Wall Street overnight, with the Dow Jones Industrial Average finishing at a new all-time closing record.
Report on Employment in the United States
The U.S. jobs report for April, one of the most important economic forecasts in global capital markets, is due on Friday, and analysts predict payrolls will comfortably exceed 1 million despite adding 916,000 jobs in March. On Wednesday, Federal Reserve Vice Chairman Richard Clarida told CNBC’s “Closing Bell” that, as the work picture in the United States improves, the central bank will be secure enough to withdraw all of the assistance it has offered since the Covid-19 pandemic ended the country’s longest expansion in history. The Treasury Secretary of the US Janet Yellen said this week, that the interest rates will have to rise to contain the US economy’s burgeoning inflation, which has been driven in part by trillions of dollars in government stimulus spending. She later changed her mind on the need for higher interest rates.
In a morning note, Rodrigo Catril, senior foreign-exchange strategist at National Australia Bank, wrote, “After persistent reassurances from Yellen and a slew of Fed officials that the coming increase in inflation will be ‘transitory,’ investors seem to be a little more worried.” “Options rates show that the market (sees) a better than one-in-three probability that US CPI will average more than 3% over the next five years,” he added, adding that high oil prices have also helped to raise inflation expectations.
Oil and currencies
The US dollar fell 0.06 percent to 91.255 against a basket of currencies, while the dollar index remained largely rangebound. The Japanese yen was trading at 109.31 per dollar, down from 109.14 earlier in the day, while the Australian dollar was up 0.1 percent at $0.7755. During Asian trading hours on Thursday, oil prices fell. Crude futures in the United States were almost flat at $65.65, while global benchmark Brent traded 0.1 percent higher at $69.03 a barrel. Overnight, Reuters announced that the US crude inventories dropped by 8 million barrels in the most recent week, beating the Energy Information Administration’s prediction of a 2.3 million-barrel decline. In corporate news, Singapore Press Holdings, publisher of the city-daily state’s broadsheet the Straits Times, has suspended trade pending an announcement.
