Asian equities stagnate, dollar boosted by US rate risk | Taiwan News

SYDNEY, Aug 8 (Reuters) – Asian stock markets got off to a hesitant start on Monday and the dollar held firm after a stunning U.S. payrolls report pushed back recession rumours, but also bolstered expectations. arguments for larger rate hikes.


Markets quickly priced in a roughly 70% chance the Federal Reserve would raise rates by 75 basis points in September, pushing two-year yields up 20 basis points on Friday and further inverting the curve. FEDWATCHRead full article


The hit data only raised the stakes for the June U.S. consumer price report due Wednesday, which could see a slight pullback in overall growth, but likely a further acceleration in inflation. underlying inflation.


“Despite sluggish growth and an expected drop to a 0.2% m/m CPI gain in July, the Fed will likely raise policy rates by 75 basis points at its September meeting,” Bruce said. Kasman, head of economic research at JPMorgan.


“The key question is whether she will decide that a significant rise in the unemployment rate is necessary to achieve her goals,” he warned. “If it does, its rate forecast will rise significantly, alongside the message that it will likely prove less sensitive to near-term growth disappointments.”


Risk haunted equity markets with S&P 500 ESc1 and Nasdaq NQc1 futures both down 0.3% in early trading.


MSCI’s broadest Asia-Pacific non-Japan equity index .MIAPJ0000PUS fell 0.2% after three sessions of gains. Japan’s Nikkei .N225 was down 0.3% and South Korea’s .KS11 was down 0.4%.


There was little obvious market reaction to the news that the US Senate on Sunday passed a $430 billion bill to tackle climate change after some tax compromises in the deal. . Read the full story


“The changes appear unlikely to substantially alter the net fiscal impact of the legislation, which continues to appear to be below 0.1% of GDP for the next few years, as new spending and new taxes roughly offset “said Goldman Sachs analysts. .


THE EXCEPTIONAL DOLLAR


Two-year Treasury yields rose to 3.24% US2YT=RR, 40 basis points above 10-year yields US10YT=RR.


Bonds also got a safe-haven offer amid unease over Beijing’s saber slashing of Taiwan as China conducts four days of military exercises around the island.Read Full Article


Chinese data released over the weekend showed exports unexpectedly picked up in July with an 18% gain, while imports lagged with a rise of just 2.3%. Read the full story


The jobs boom combined with the jump in yields supported the US Dollar, which was up at 106.640 against a basket of currencies =USD which gained 0.8% on Friday. XRF/


“This key data point is a million miles away from a current recession, both on a job change basis and unemployment levels,” said Alan Ruskin, global head of G10 FX strategy at Deutsche. Bank.


“Data like this will fuel any thinking about ‘American exceptionalism’ and is very positive for the USD against all currencies.”


The dollar held at 135.26 yen JPY=EBS after surging 1.6% on Friday, while the euro struggled at $1.0164 EUR=EBS and not far from chart support around 1.0095 $.


The single currency was not helped by news that Moody’s had downgraded Italy’s outlook to negative as the resignation of Prime Minister Mario Draghi rocked the country’s political landscape. Read the full story


The dollar’s rise was a setback for gold, although it managed to rebound from lows hit on Friday to settle at $1,773 XAU=. GOL/


Oil prices continued their recent decline after suffering the worst week since April on concerns about stalled global demand as central banks continue to tighten. WHERE


Brent LCOc1 fell 97 cents to $93.95, while US crude CLc1 lost 89 cents to $88.12 a barrel.

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