Mettis Global News
Mettis Global News
Mettis Global News
Mettis Global News

Trending :

Asian markets fall as US jobs report dents rate cut hopes

Asian stocks cautious amid European political uncertainty
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

June 10, 2024 (MLN): Asian markets mostly fell Monday as a mixed jobs report eased worries about the US economy but dampened hopes for interest rate cuts, while political uncertainty in Europe weighed on the euro, as APP reported.

With the Federal Reserve meeting this week, investors are keenly awaiting its updated "dot plot" outlook for borrowing costs, with commentators split on how many, if any, reductions are in the pipeline.

All three indexes on Wall Street ended lower Friday — but with the S&P 500 and Nasdaq still close to record highs — after data showed the world's biggest economy added far more jobs than estimated last month.

The reading, which came after separate figures earlier in the week had indicated the labor market was finally softening, suggested there was still some way to go before the Fed would be comfortable with cutting rates.

However, traders were comforted that the country was not heading for a recession, as some had feared in light of data showing factory activity contracted for a second straight month in May.

All eyes are now on the Fed's policy decision Wednesday. Bank officials are widely tipped to hold borrowing costs at their two-decade high but traders are focusing on their forecast for rates this year.

The last guidance indicated three cuts but several decision-makers have said they wanted to see more evidence inflation was under control and the jobs market was weakening before moving.

Commentators are split on how many reductions there will be, with predictions ranging from zero to three.

"We still expect the Fed to cut rates in September, but another set of prints like (Friday's) would likely also take that off the table," Principal Asset Management's Seema Shah said soon after the jobs figures were released.

"The positive news, however, is that with a labor market this strong, the US economy is nowhere near recession territory."

Asian equities struggled Monday, with Tokyo rising but losses in Seoul, Singapore, Manila, Jakarta and Wellington.

Hong Kong, Shanghai, Sydney and Taipei were closed for holidays.

On currency markets, the euro fell against its peers after far-right parties scored big in European Union elections.

They finished first in France, Italy and Austria and came second in Germany and the Netherlands, according to preliminary results.

Big losses for the liberal party of French President Emmanuel Macron, which lost out to the far-right National Rally party led by Marine Le Pen, resulted in Macron swiftly calling a snap parliamentary vote, fueling uncertainty in the key EU member.

Copyright Mettis Link News

Posted on: 2024-06-10T09:37:28+05:00