(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 rose slightly as markets in Japan and mainland China were closed for public holidays. On Thursday, the S&P 500 rose 0.9% and the tech-heavy Nasdaq 100 rose 1.3%, but futures trading strengthened after Apple Inc.'s better-than-expected earnings.
The company's shares rose more than 6% in post-market trading after rising modestly during regular hours. The iPhone maker expected a return to growth this quarter after sales declined in five of the past six quarters due to a weak smartphone market and headwinds from China.
The yen rose early Friday after closing Thursday at a nearly three-week high against the U.S. dollar. The currency is likely facing public support, with some estimates suggesting the country spent more than $20 billion in its latest intervention. The dollar index held firm after suffering its steepest decline since December on Thursday.
Australian and New Zealand yields fell on Friday after US Treasuries rebounded off the curve on Thursday. The yield on the U.S. 10-year Treasury note fell 5 basis points to 4.58%, while the yield on the policy-sensitive 2-year note fell 9 basis points. Government bond trading in Asia will be closed due to a Japanese holiday.
The move comes ahead of U.S. non-farm jobs data that 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.
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 at about $2,303 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
-
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 8:13 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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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0730.
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The Japanese yen rose 0.3% to 153.11 yen to the dollar.
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The offshore yuan was almost unchanged at 7.2064 yuan to the dollar.
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The Australian dollar rose 0.1% to $0.6572.
cryptocurrency
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Bitcoin rose 0.9% to $59,279.97
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Ether rose 0.3% to $2,995.3
bond
merchandise
This article was produced in partnership with Bloomberg Automation.
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