By Wayne Cole SYDNEY, Sept 7 (Reuters) - Asian tech shares rallied on Monday as the robust U.S. jobs report was seen as positive for global growth even as it narrowed the odds on a rise in interest rates. Meanwhile, oil prices climbed 1.1% to $97.37 a barrel, after a surge of 8% last week. This rise in oil prices is not good news for diesel prices, which hit record highs last week.
Diesel is critical for transport, shipping, farming, and manufacturing. This inflationary pressure raises the stakes for a key U.S. consumer price index (CPI) reading this week, influencing the European Central Bank’s decision to lift rates to 2.75% on Thursday. Futures markets suggest a 75% chance of another rate hike to 3.0% by December.
The risk of hawkish ECB guidance could keep European stocks volatile. On Wall Street, a U.S. holiday kept trading light, with S&P 500 futures down 0.1% and Nasdaq futures up 0.1%. The focus this week is on the U.S.
August CPI report, with median forecasts for a 0.2% rise in core inflation, and a risk of 0.3%. In Asia, tech stocks showed resilience, with Japan’s Nikkei rebounding 2.0% after a similar loss last week, and South Korea’s Kospi rising 4.3%. Goldman Sachs predicted a further 75% rise in the Kospi to 12,000, though this has been a long-standing forecast.
Chinese blue chips added 0.2%, with relief that China’s finance ministry will inject $54 billion into state-owned insurers and banks. MSCI’s Asia-Pacific index outside Japan climbed 1.5%. Rising bond yields remain a drag on equity valuations, with Treasury 10-year yields near 4.7840%, the highest since late 2023.
A high CPI reading could push yields closer to 5.0%. The U.S. jobs report left markets pricing a 58% chance of a rate hike on September 16 and a 70% chance in October. Central banks are now moving, with Bruce Kasman from JPMorgan forecasting two more hikes from the ECB and Bank of Japan before year-end, and a case for the Fed to act earlier and more aggressively.
In currency markets, the dollar index saw only a mild lift from the jobs report, as concerns over U.S. debt and policy uncertainties weakened its purchasing power. President Donald Trump warned he would halt international trade with surplus countries if the Fed did not cut rates. The dollar index stood at 99.135, near recent lows of 98.558.
The euro held steady at $1.1610, while the yen weakened slightly to 156.04 yen, threatening support at 155.00 after a 2.4% drop last week. In commodities, gold slipped 0.3% to $4,411 an ounce, finding support at $4,282 last week. The U.S. and Iran attacked ships in the Gulf, with Tehran announcing a restricted zone outside the Strait of Hormuz after U.S. forces hit three Iranian tankers and Iran’s Islamic Revolutionary Guard Corps launched ballistic missiles at U.S.
Navy ships.
Source: Euronext Markets: Real-time Stock Market Data | live
