With Wall Streets strong performance, and the better than expected employment data for June, the U.S. dollar extended gains leading to a rally in Asia’s markets this morning, what is the impact for you and what do you need to know for your finance preservation?
Staying in Asia, Japan’s core machinery orders unexpectedly tumbled in May on persistent weakness in the services sector, and the government downgraded the outlook for orders for the first time in eight months, raising doubts about the strength of the economic recovery, while Four Arab states refrained on Wednesday from slapping further sanctions on Qatar but voiced disappointment at its “negative” response to their demands, explain RAKBANK.
The dollar was on solid footing on Monday, after a bigger-than-expected increase in U.S. jobs suggested the Federal Reserve would stick with its tightening plans for the rest of this year. Against the yen, the dollar was 0.2% higher at 114.16 after notching a high of 114.21, its loftiest level since May 11. The dollar index, which gauges the greenback against a currency basket, was steady at 96.012. The Aussie was up at 86.85 yen on Monday having touched a four-month peak of 86.95 last week. The next target is the 88.17 top hit in February and a break there would take it to territory not trod since late 2015. The rand had slipped 0.11% to 13.4575 per dollar, reversing a brief rally to 13.30, to bring losses for the week to more than 2.5%.
Most U.S. Treasury yields rose on Friday, with longer-dated yields briefly hitting multi-week highs, after U.S. jobs data came in strong enough to keep expectations alive for tighter global central bank monetary policy. Benchmark 10-year Treasury yields hit a more than eight week high of 2.398% and 30-year yields hit a more than six-week high of 2.943%. Yields were also rising in Europe, with 10-year Bund yields hitting an 18-month high on Friday of 0.58%.
Gold held steady early Monday, hovering around near four-month lows after stronger than expected U.S. jobs data indicated that the Federal Reserve would maintain its stance on monetary tightening. Spot gold was nearly flat at $1,213.16 per ounce. Gold fell more than 2% last week and touched its lowest since March 15 on Friday. U.S. gold futures for August delivery rose 0.3% to $1,212.80 per ounce. Oil prices recovered some losses on Monday after a 3% fall in the previous session, but markets remain under pressure from high drilling activity in the United States and ample supplies from producer club. Brent crude futures, the international benchmark for oil prices, were at $47.08 per barrel, up 37 cents, or 0.8%, from their last close. U.S. West Texas Intermediate crude futures were at $44.60 per barrel, up 37 cents, or 0.8%
Wall Street’s S&P 500 stock index closed higher after a selloff on Thursday as investors, while reassured by the strong jobs number, bet weak wage growth would limit the extent of Fed hawkishness. The Dow Jones Industrial Average rose 94.3 points, or 0.44%, to 21,414.34, the S&P 500 gained 15.43 points, or 0.64%, to 2,425.18 and the Nasdaq Composite added 63.62 points, or 1.04%, to 6,153.08. The pan-European FTSEurofirst 300 index lost 0.12% but MSCI’s gauge of stocks across the globe gained 0.19%. MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.55% while Japan’s Nikkei rose 0.7%. Australian stocks were up 0.6 % and South Korea’s KOSPI added 0.4%. Hong Kong’s Hang Seng gained 1%, though China’s bluechip shares were flat.
Cairo’s blue chip index edged down 0.1%, a far milder reaction than the 2.5% drop that followed a previous rate hike on May 21. Qatar’s index edged down 0.2% in the lowest daily traded volume since Saudi Arabia and three other Arab states cut diplomatic and trade links with Doha on June 5. The Abu Dhabi index added 0.3%, as shares of Dana Gas, which made up a little half of the total market turnover on Sunday, rebounded 1.5%.