Asian markets rise again after strong US jobs data

10 July, 2018 12:00 AM printer

HONG KONG: Asian markets rallied on Monday, extending their gains at the end of last week, following another strong US jobs report that reinforced confidence in the US economy and helped settle trade war nerves.

While Friday’s tit-for-tat tariffs on billions of dollars of goods by the world’s top two economies were seen as damaging, analysts said the the impact would be limited, reports AFP.

Global markets had been tumbling ahead of the imposition of the tariffs but bounced on Friday.

The upbeat sentiment carried over into the new week after data showed the US economy created more than 200,000 jobs in June, beating expectations.

That was compounded by the fact that average hourly earnings growth remained sluggish, while the unemployment rate edged up, easing pressure on the Federal Reserve to lift interest rates.

The result helped all three main indexes on Wall Street to end on a high.

And in Asia on Monday Tokyo finished 1.2 percent higher, while Shanghai surged 2.5 percent and Hong Kong added 1.7 percent in the afternoon.

Sydney rose 0.2 percent, Singapore climbed 1.3 percent, Seoul added 0.6 percent and Taipei was more than one percent higher.

In early European trade London and Frankfurt each rose 0.4 percent, while Paris gained 0.3 percent.

However, concerns remain that the trade row between China and the US could intensify, with Donald Trump threatening hundreds of billions of dollars more in Chinese goods.

Stephen Innes, head of Asia-Pacific trading at OANDA, said that “should the (Trump) administration follow through with the threat of a $200 billion-plus duties on Chinese goods, this would have some negative implication for both the US and global growth prospects”.

Eyes are now on the release of Chinese trade data later this week.

On currency markets the Chinese yuan edged up against the dollar, having tumbled in recent weeks on the trade spat.

While there had been speculation among some observers that Beijing would allow the unit to weaken in order to offset the impact of a trade war, authorities stressed they would not weaponise it.

The pound managed to eke out some gains as Fed rate hike expectations ease and despite Westminster upheaval after Prime Minister Theresa May’s point man on Brexit negotiations resigned over the government’s plan to retain strong economic ties with the EU even after leaving.