Asian Stocks Gain As US Jobs Blockbuster Puts Fed Hikes In Focus

ASIAN STOCKS TALKING POINTS:

  • Asian stocks rose across the board
  • The US Dollar was supported anew by good economic news from its homeland
  • The Australian Dollar market looked to the Reserve Bank

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Asian stocks rose on Monday, apparently reacting to last week’s very strong US employment data.

The world’s largest economy added a chunky 232,000 nonfarm jobs in April, taking the unemployment rate down to an 18-year low. Wage pressures were also seen to increase, a fact which for many in the markets seems to have nailed down a June interest rate rise from the Federal Reserve.

Wall Street had understandably cheered this news on Friday, Monday brought Asia’s turn. The Nikkei 225 was up 1.3% in the Tokyo afternoon, with all other major markets around the region higher too. The Hang Seng added more than 1%, with the ASX and Shanghai Composite in the green to the tune of 0.5% or so.

Markets managed to shrug off ongoing trade concerns, despite the latest US sanctions and increasing worries about the cohesion of NAFTA- the North American Free Trade Area. The indexes probably remain vulnerable to trade headlines, however, so keep an eye out.

The US Dollar caught a tailwind from those Fed-hike expectations, one it retained through the Asian session. Its Australian cousin failed to move much on some strong second-tier economic data. Investors remain focused on the Reserve Bank of Australia which will give its June monetary policy decision on Tuesday- no change is expected to the Official Cash Rate’s now venerable 1.5% record low.

AUD/USD remains stuck in a broad trading range, one which seems unlikely to break to the upside unless the RBA sounds a more hawkish note, or Australian growth data pleases the crowds on Wednesday- the latter seems more likely at present.

AUSTRALIAN DOLLAR VS US DOLLAR, DAILY CHART

Gold priced inched back a little on that stronger US Dollar, while crude oil prices also fell back as markets look well supplied, both by traditional producers and the US shale industry.

US durable goods orders are likely to be the data highlight of the remainder of Monday.

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Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

— Written by David Cottle, DailyFX Research

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