On Monday morning, Asian stocks climbed up in the wake of the prospect of an imminent interest rate hike by the Federal Reserve’s fading after Friday’s unexpectedly weaker US employment data.
US stock indexes had risen more than one percent on Friday as worries about the economy after the disappointing jobs report gave way to a robust rally in energy and materials stocks.
Taking a lead from Friday’s Wall Street gains, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose to a 2-week high and was last up 1.6 percent. Australian shares rallied 1.7 percent, Hong Kong’s Hang Seng .HSI jumped 1.8 percent and South Korea’s Kospi .KS11 rose 1.2 percent, an international news agency reported.
‘Risk aversion weakened today as a weak US employment data supported expectations that the Fed would put off the timing of rates hike,’ said Kim Young-jun, a stock analyst at SK Securities in Seoul.
Tokyo’s Nikkei .N225 climbed 1.2 percent. Chinese financial markets will be closed until Oct 8 for national holidays.
Data released Friday showed US non-farm payrolls rose by 142,000 in September, considerably lower than the 203,000 jobs the markets had expected.
The lacklustre jobs report, which also showed a stall in US hourly wage growth, fueled doubts that the economy was robust enough to withstand a rate hike before year-end.
The possibility of the Fed delaying the lift-off date for rates also meant its loose policy, which has helped shore up risk assets globally by providing cheap cash, would continue a little longer. The Dow DJI and S&P 500 SPX both gained more than 1 percent Friday after initially shedding more than 1.5 percent.
‘The print will completely rule out this month for a rate rise in the U.S. and will put the December meeting in doubt. The market reactions to the non-farm payrolls are unmistakable – they see it as a trend and have recycled the 2012 to 2014 adage of, ‘bad news is good news’,’ wrote Evan Lucas, market strategist at IG in Melbourne.
Prices of safe-haven government bonds gained on the downbeat US jobs data, sending benchmark 10-year Treasury yields US10YT=RR to near 6-week lows on Friday. German Bund yields dropped to 4-month troughs and the 30-year Japanese government bond yield JP30YTN=JBTC slid to its lowest since late April.
In currencies, the greenback was on the defensive, with the dollar index .DXY nudged down 0.1 percent to 95.714 after losing 0.4 percent overnight.
The dollar was little changed at 119.935 yen JPY=.
The euro rose 0.3 percent to $1.1245 EUR= after climbing to as high as $1.1319 on Friday, a 10-day peak.
