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Monday, November 04, 2024  
02 Jumada Al-Awwal 1446  

Asia slips into holiday lull, U.S. data set to shine

Asian share markets got off to a slow start on Monday as holidays in China and Japan crimped volumes and investors...

Asian share markets got off to a slow start on Monday as holidays in China and Japan crimped volumes and investors awaited a raft of data this week which should show the U.S. leading a global economic recovery.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) slipped 0.7%, led by a 1.3% drop in Taiwan (.TWII). Japan's Nikkei (.N225) was shut for a holiday, but Nikkei futures edged up 0.4%.

Wall Street extended its bull run with Nasdaq futures up 0.1% and S&P 500 futures 0.3%. EUROSTOXX 50 futures inched up 0.1%.

A busy week for U.S. economic data is expected to show resounding strength, particularly for the ISM manufacturing survey and April payrolls. Forecasts are that 978,000 jobs were created in the month as consumers spent their stimulus money and the economy opened up more.

Analysts at NatWest Markets, for instance, see payrolls surging by 1.25 million in April with unemployment diving to 5.2%, from 6% in March.

Such gains could stir speculation of a tapering in asset purchases by the Federal Reserve, though Chair Jerome Powell has shown every sign of staying patient on policy.

"Payrolls should show another near 1 million jobs gain, but that would still leave them 7.5 million below pre-COVID levels," said Tapas Strickland, a director of economics at NAB.

"Chair Powell recently noted that it would take a string of months of job creation of about a million a month to achieve the substantial progress required to justify tapering QE."

Powell is due to speak later on Monday and will be followed by a raft of Fed officials this week. Dallas Fed President Robert Kaplan caused a stir on Friday by calling for beginning the conversation about tapering

Powell's patience has helped limit selling pressure in Treasuries, yet 10-year yields still ended last week with a rise of 6 basis points to be last at 1.626% .

The rise offered some support to the U.S. dollar which has been pressured by the rapid expansion of the U.S. budget and trade deficits, a by-product of the economy's outperformance.

The dollar index stood at 91.330 and off a two-month trough of 90.422, though it still ended April with a loss of 2%.

The euro was steady at $1.2021 , having backtracked from a nine-week peak of $1.2149 on Friday. It now has solid support around $1.1990.

The dollar has fared better on the yen at 109.57 , well above its recent low of 107.46.

In commodity markets, gold held to a narrow range around $1,772 an ounce sidelined in part by investor interest in crypto currencies as an alternative hedge against inflation.

Ether hit a record high on Monday above $3,000, extending last week's rally in the wake of a report that the European Investment Bank (EIB) could launch a digital bond sale on the ethereum blockchain network.

Oil prices ran into profit-taking, having ended last month with gains of 6% to 8%.

Brent was last down 23 cents at $66.53 a barrel, while U.S. crude lost 22 cents to $63.36 per barrel.

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