The Asian stock market is on the rise following the release of stronger-than-expected US jobs data, which has reaffirmed the health of the world’s largest economy and boosted optimism for a smooth landing. This positive news has led to gains in Australian and Japanese share markets as the S&P 500 and Treasury yields also increased on Friday, impacting bets on the Federal Reserve’s next interest-rate cut. The 10-year Treasury yield rose one basis point on Monday, reflecting a positive sentiment in the market.
The trading atmosphere is currently influenced by expectations of US economic resilience after the addition of the most jobs in six months. This scenario is expected to bolster the US dollar and cause a decline in haven assets. According to Kyle Rodda, a senior analyst at Capital.com, Asia is in a favorable position due to the Goldilocks US economy and recent stimulus efforts in China. This makes it an opportune time to reallocate investments to Asia, given the signs of economic strength and potential outperformance in cyclical sectors that Asia heavily focuses on.
Looking ahead, traders are preparing for China’s reopening after the Golden Week holiday, which saw stimulus measures positively impact the Hang Seng Index. The upcoming briefing by officials from the National Development and Reform Commission is expected to shed light on incremental economic policies, generating excitement in the market. Additionally, New Zealand bonds are expected to fall slightly as the nation’s central bank is anticipated to cut interest rates by 50 basis points on Wednesday.
In other developments, oil prices are experiencing a slight downturn as traders evaluate potential retaliatory actions by Israel against Iran following a recent missile attack. President Joe Biden has discouraged a strike on Tehran’s crude fields, causing uncertainty in the oil market. Germany is also expected to downgrade its growth outlook this week, while inflation readings in emerging markets and the release of minutes from the Fed’s September policy meeting are on the agenda. As earnings season approaches, attention will turn to the September CPI print, adding more depth to the market dynamics.
As global markets continue to evolve, it’s essential for investors to stay informed and adapt their strategies accordingly. Stay tuned for more updates and insights on the latest trends in finance and investment on Extreme Investor Network.