Asian markets rally on China rate cut hopes, US jobs data

August 30, 2023 (MLN): Asian investors on Wednesday tracked a rally on Wall Street as a softer-than-expected report on US job openings soothed fears the Federal Reserve will hike interest rates again, as APP reported.

The mood brightened further in Shanghai and Hong Kong by a report that China's biggest state-backed banks would slash rates on mortgages and deposits as part of a drive to support the country's beleaguered property sector.

Wall Street enjoyed one of its best days in months thanks to a surge in big names including Amazon and Apple after the Labor Department's closely followed Job Openings and Labor Turnover Summary (JOLTS) figure fell well short of forecasts.

Also, a separate report revealed consumer confidence falling owing to concerns about jobs, higher rates and lingering inflation.

The readings come ahead of the release of the Fed's preferred gauge of inflation -- the personal consumption expenditures price index -- this week as well as data on non-farm payrolls and factory activity.

Analysts said the JOLTS reading would give monetary policymakers room to hold off lifting borrowing costs further, having already pushed them to a two-decade high to tame prices.

The cooling of rate expectations helped bring US Treasury yields down and even allowed investors to bring forward bets on a rate cut to June, from July, according to Bloomberg News.

"With layoffs estimated to be 8.8 million, it is still around 70 percent above its long-term average, but markets don't care about that," said Matthew Simpson at City Index.

"It's the rate of change that matters. And with job openings falling to a 28-month low, it suggests the labour market is indeed softening

"And with markets ready to pounce on softer US data, any signs of weakness is likely to weigh further on yields and the US dollar. And that could be great for equity market sentiment."

Hong Kong, Shanghai, Tokyo, Sydney, Seoul, Singapore, Taipei, Manila and Jakarta were all well up.

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