Global Markets Asian stocks spurred higher by U.S. data; Aussie falters

Business & Markets 2013
Written by Reuters
Monday, 06 May 2013 11:40
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SYDNEY/SINGAPORE (May 6): Asian stocks rose on Monday as
investors gave the thumbs up to an upbeat U.S. labour force report that
sent Wall Street to an all-time closing high last week, while the dollar
held its ground against the yen.
MSCI's broadest index of Asia-Pacific shares outside Japan climbed
nearly one percent with Australia's main share index also about a
percent higher. Malaysian shares were the biggest gainers, rising 3
percent after the ruling coalition government won a tight election.
Japanese financial markets are shut on Monday for a public holiday and
will reopen on Tuesday.
The gains in stock markets came after data on Friday showed U.S.
employment rose at a faster pace than expected in April and hiring was
much stronger than previously thought in the prior two months, a relief to investors nervous about a U.S. slowdown.
But other U.S. data, including a survey of the vast services sectors, was less encouraging and led investors to suspect that
the Federal Reserve will probably maintain its aggressive stimulus programme.
"We take the April employment report, in conjunction with other data, as supportive of the Fed keeping its (debt) purchase
programme intact," analysts at Barclays Capital wrote in a note.
"Labour market and inflation trends are soft enough to reduce the likelihood of tapering, in our view, but steady enough to
keep the Fed from increasing the pace of its purchases."
The data helped lift U.S. Treasury yields. The dollar however was less consistent, gaining against the Australian dollar and
keeping Friday's gains against the low-yielding yen, but losing ground to emerging Asian currencies.
Having rallied more than 1 percent against the yen on Friday, the dollar last traded at 99.06 yen, nearly flat on the day. It is
within a hair's breath of a 4-year peak near 100 scaled last month.
The yen was likely to stay on the defensive after the boost to risk sentiment from the better-than-expected U.S. jobs data,
said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.
"Rather than dollar strength, the sentiment is more along the lines of going risk-on. It feels like yen-selling with cross/yen pairs
leading the way," Okagawa said.
AUSSIE FALTERS
While other currencies in Asia outperformed the greenback, the Aussie slipped 0.3 percent to $1.0285, although it stayed off
last week's low near $1.0220.
The decline followed local retail sales data, where the monthly data disappointed markets but the quarterly number, coupled
with U.S. jobs data, gave markets reason to slightly tone down expectations of a cut in interest rates at the Reserve Bank of
Australia's policy meeting on Tuesday.
Commodities also added to gains, having powered higher on Friday in the wake of the U.S. jobs report. U.S. crude rose more
than one percent towards $97.00 a barrel, reaching fresh one-month highs.
Copper is in focus after it stole the limelight with a 6.5-percent rally to $7,270.00 on Friday.
However, to put its move in perspective, copper had fallen nearly 20 percent in the past three months partly on worries about
a slowing global economy.
Malaysia's ringgit and stock market were however the regional standouts on Monday, with the ringgit hitting a 20-month high
after Sunday's election saw the governing coalition extend its half-century rule, albeit with its worst-ever performance.
The National Front, or Barisan National (BN), won 133 seats in the 222-member parliament in Sunday's election, although it
failed to regain the two-thirds majority it lost for the first time in 2008. - Reuters