Asia breathes sigh of reduction as U.S. jobs fail to shock By Reuters

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© Reuters. FILE PHOTO: A man wearing a protective face mask after a coronavirus outbreak speaks on his cellphone in front of a screen showing the Nikkei index outside a brokerage firm in Tokyo, Japan, Feb.26, 2020. REUTERS / Athit Perawongmetha / Ph

Posted by Wayne Cole

SYDNEY (Reuters) – Asian stocks firmed on Monday as the dollar fluctuated after the eagerly anticipated US salary report for May showed the rebound is on the right track, but not so hot that it is cutting policy Federal Reserve could push forward.

Investors were curious how stocks of big tech companies would react to the G7’s agreement on a minimum global corporate tax rate of at least 15%, though getting the G20 as a whole could be challenging.

So far, the reaction at Nasdaq has been subdued and little changed.

Also of interest will be the dispute over US President Joe Biden’s proposed $ 1.7 trillion infrastructure plan, in which the White House is rejecting the latest Republican offer.

MSCI’s broadest index for Asia Pacific stocks outside of Japan rose 0.3% and appeared to break three days of losses. rose 1.0%, its highest level in almost a month, and South Korea gained 0.7%.

While the 559,000 increase in US workforce missed projections, it was still a huge relief after the shockingly weak April report, while the 5.8% unemployment rate showed that there was still a long way to go Fed of full employment was.

“The data was perfect for a Goldilocks risk outlook: not too hot to worry about a faster Fed tightening, and not too cold to worry about the prospect of recovery,” said John Briggs, strategist at NatWest Markets.

“This resulted in a weaker USD, better stocks, added to past supply in commodities and boosted emerging markets.”

Attention will now turn to Thursday’s US consumer price report where there is a risk of another high number, although the Fed is still arguing the hike is temporary.

Briggs suggested that Fed officials could open the door at the June political session to talk about a throttling, with a start in early 2022 and a rate hike not coming until 2024.

The European Central Bank is holding its political session on Thursday and is widely expected to maintain its stimulus measures with a more distant perspective.

US 10-year bond yields were a fraction higher at 1.567% after falling 7 basis points on Friday and returning to the lower end of the three-month trading range.

This decline, coupled with an improvement in risk appetite, put the dollar on the defensive. It last stood at 90.100 versus a basket of currencies after slipping from a high of 90.629 on Friday.

The euro held at $ 1.2170 after bouncing off a three-week low of $ 1.2102 on Friday, while the dollar was back at 109.52 yen from a high of 110.33.

The dollar’s retreat helped gold stabilize at $ 1,890 an ounce until it hit a low of $ 1,855 on Friday. [GOL/]

Oil prices stabilized after breaking the $ 72 a barrel mark for the first time since 2019 as OPEC + supply discipline and recovering demand countered concerns about patchy global COVID-19 vaccination. [O/R]

Brent rose 6 cents to $ 71.92 a barrel, while it rose 9 cents to $ 69.71 a barrel.

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