Stocks in Asia rally after good USA jobs report

Cornelia Mascio
Marzo 13, 2018

The MSCI All-Country World index of stocks, which tracks shares in 47 countries was up less than 0.1 per cent.

The world index has recovered about half its losses sustained during a shakeout in stocks in February.

"Concerns towards trade conflict stemming from USA tariffs continue to linger in the background, capping risk appetite, pushing Treasury yields lower which in turn weighing on the dollar", said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

Key indicators for the Fed dominate the economic agenda in the coming week.

"Today's CPI inflation data is likely to add further colour to the USA inflation picture, however it probably won't add any further clarity to the overall inflation outlook puzzle, given that the Fed doesn't use CPI as its inflation benchmark", said Michael Hewson, chief markets analyst at CMC Markets in London.

Spreadbetters expected a slightly lower start for European stocks, with Britain's FTSE.FTSE dipping 0.1 percent, Germany's DAX.GDAXI inching down 0.05 percent and France's CAC.FCHI shedding 0.07 percent.

The dollar fell on Tuesday and share markets flinched as news broke that U.S. President Donald Trump had ousted yet another of his top team, this time Secretary of State Rex Tillerson.

But Friday's wage growth numbers eased some of thoseconcerns, with traders sticking to their bets of threeinterest-rate increases in 2018.

MSCI's broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS was up 0.2 percent after spending much of the day swerving in and out of negative territory.

The S&P 500 and the Dow slipped on Monday as the USA tariffs signed into law last week weighed on industrials, while a rise in tech stocks boosted the Nasdaq to a new record high.

The yen tends to suffer in an environment when riskier and higher-yielding assets are bid but Morgan Stanley strategists said in a note that a further deterioration in the political situation that affected the position of Abe, could see the yen "forcefully return towards its previous upward trend".

The dollar index against a basket of six major currencies rose 0.1 percent to 89.999.DXY after shedding about 0.2 percent overnight.

"The broader story remains that of US monetary policy normalization in the backdrop of an improving economy and a further decline in currency market volatility would only fuel more risk taking appetite", said Commerzbank's FX strategist Thu Lan Nguyen.

Slovak Prime Minister Robert Fico's government moved closer to collapse on Monday after his junior coalition partner called for early elections amid a political crisis sparked by the killing of a journalist. The Australian dollar recovered from three-month lows and the euro gained almost 2 percent in the last 10 trading sessions against the Swiss franc.

In commodities US crude futures CLc1 and Brent were both down half a percent each at 61.01 per barrel and 64.60 per barrel respectively.

USA crude futures CLc1 lost 3 cents to $61.32 per barrel after losing 68 cents the previous day.

Spot gold fell 0.2 per cent to $1,318 per ounce.

The dollar rose to a two-week high and was up 0.7 percent on the day at 107.28 yen, its biggest single-day rise since late October.

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