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SINGAPORE, June 3 (Reuters) – Asian stocks were mostly up on Friday as investors hoped U.S. jobs data, due later, could prompt the Federal Reserve to ease its current aggressive pace of inflation. rising interest rates over the next few months.
MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) rose 0.56%, riding a strong close on Wall Street overnight. The Japanese Nikkei (.N225) rose 1.2% and shares in Seoul (.KS11) rose 0.46%, while the resource-rich Australian index rose 0.79%.
European futures on the STOXX 50 rose 0.76%.
Markets in China, Hong Kong and the UK are closed on public holidays.
Overnight, tech stocks led a rally on Wall Street, sending the S&P500 (.SPX) up 1.84%, the Nasdaq Composite (.IXIC) 2.68% and the Dow Jones Industrial Average (. DJI) by 1.29%. Read more
The ADP’s National Jobs Report on Thursday showed that the U.S. payroll rose at a slower pace than expected last month. Read more
Investors are now looking to the full US Department of Labor jobs report, due later Friday, to confirm a slowdown in the job market, which could convince the Fed to slow interest rate hikes. for the rest of the year.
“For equities right now, anything that could be seen as capping Fed tightening could be seen as supportive,” said Rob Carnell, head of Asia research at ING.
“So, therefore, weak macro data turns positive for equities.”
Economists expect about 325,000 jobs to have been created last month in the United States and estimate that unemployment has fallen to 3.5%.
“Any deviation from these numbers that shows the labor market is holding up better than that could well be negative for equities and vice versa,” Carnell said.
Inflation is the main concern of the Fed and global policymakers. Fed officials said U.S. interest rates were likely to continue to be raised aggressively unless inflation moderated.
“Initial pressure to hike rates that had built the previous day on strong economic data immediately eased after a weaker than expected ADP jobs release in May, suggesting things are calming down,” he said. said Stephen Innes of SPI Asset Management.
Markets blocked back-to-back 50 basis point hikes from the Fed in June and July, but the dollar was pushed this week by uncertainty about what will happen after that.
The U.S. dollar currency index, which tracks the greenback against six major currencies, was at 101.770, pausing a rally earlier in the week.
The yen was kept under pressure by ultra-low interest rates in Japan and last stabilized at 129.80 to the dollar, after losing 2% against the greenback this week.
US Treasury yields were mixed ahead of the nonfarm payrolls data.
The benchmark 10-year yield was at 2.9204% while the 2-year yield, which tends to be sensitive to US rate expectations, was down to 2.6484%.
Oil prices remained unchanged after crude inventories fell in the United States amid strong demand, even as OPEC+ oil-producing countries agreed to increase production. Brent crude futures were at $117.17 a barrel, while U.S. West Texas Intermediate crude stood at $116.34. Read more
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Additional reporting by Tom Westbrook in Singapore Editing by Shri Navaratnam and Sam Holmes
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