Asian markets hit as US jobs data dent hopes for big rate cut

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MG News | July 08, 2019 at 09:05 AM GMT+05:00

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July 8: Asian markets retreated Monday and the dollar held gains after a blockbuster US jobs report dashed hopes that the Federal Reserve would slash interest rates this month.

Labor Department data showed that despite recent disappointing indicators, the world's top economy continues to show resilience as it created far more posts than expected in June.

The news took traders by surprise and sent all three main indexes on Wall Street falling from record highs, while the dollar bounced against its main peers.

Investors had been hoping the Fed would cut borrowing costs by as much as 50 basis points at its next policy meeting at the end of the month but Friday's report reduced the chances of that happening.

And Asian investors extended the selling, with Hong Kong down 1.8 percent, Shanghai 2.4 percent lower and Tokyo off 0.9 percent.

Sydney shed one percent, Seoul dropped 1.7 percent and Singapore was off 0.9 percent. Manila, Wellington, Taipei and Jakarta were also lower.

"Markets remain convinced the Fed will cut rates at the end of the month," said OANDA senior market analyst Edward Moya.

"But the strong labour market has many questioning whether we will see just two rate cuts in 2019 and not what some call the required three to see US stocks make another 3-5 percent push higher into uncharted territory."

AFP/APP

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