Growing hopes that the Federal Reserve and other central banks are about to cut interest rates helped push Asian stocks higher on Friday.
Traders tracked gains in New York as well as records in London and Frankfurt as they cheered new US data indicating that the labor market is beginning to decline, giving central bankers room to ease monetary policy.
The higher-than-expected numbers show that unemployment claims rose to their highest level since August following news last Friday that the number of new jobs created in April was far lower than expected.
US Treasury yields, a proxy for interest rates, fell.
The readings allayed fears that borrowing costs will remain high through the year after a series of higher-than-estimated inflation readings in the first four months.
Advertisement – Scroll to continue
However, speculation is growing that the Fed will cut interest rates in September, although analysts urged caution as policymakers were keen to see evidence that rates were coming under control.
San Francisco Fed President Mary Daly said that while current policy has the economy under control, it could take “more time” for inflation to fall to officials’ 2% target.
“The data is noisy so we cannot yet say that a change in trend has occurred, but the next few weeks will be important. Further increases from here will encourage the market to price the new Fed easing cycle with more confidence.” Rodrigo Catril of National Australia Bank said.
Advertisement – Scroll to continue
Earlier on Thursday, the Bank of England hinted it could turn lower in the summer after keeping interest rates unchanged at their highest level in 16 years.
While inflation was slightly higher than expected, Bank of England President Andrew Bailey said he was “optimistic that things are moving in the right direction.”
The European Central Bank is expected to cut interest rates in June.
Advertisement – Scroll to continue
Positive developments saw markets in London and Frankfurt end at record levels.
With Wall Street enjoying a strong day, Asian investors entered Friday on a positive note.
Hong Kong continued its impressive run that saw it enter a bull market after rising more than 20 percent from its January lows, while there were also gains in Tokyo, Sydney, Seoul, Singapore, Taipei and Manila.
Advertisement – Scroll to continue
However, Shanghai and Wellington stocks fell.
Oil prices extended gains as investors monitored developments in the Middle East, with Hamas saying on Friday that its team in Gaza ceasefire talks in Cairo had left, adding that “the ball is now entirely in Israel’s hands.”
Egyptian state-linked Cairo News Channel reported on Thursday that representatives of the two camps left after two days of negotiations with the aim of reaching a ceasefire agreement.
Advertisement – Scroll to continue
Tokyo – Nikkei 225: up 0.6 percent to 38,311.63 (break)
Hong Kong – Hang Seng Index: rose 1.0% to 18,727.56
Shanghai – Composite: Decreased by 0.4 percent to 3,140.77
USD/JPY: rose to 155.73 yen from 155.47 yen on Thursday
EUR/USD: fell to $1.0774 from $1.0785 on Wednesday
GBP/USD: fell to $1.2511 from $1.2524
EUR/Pound: rose to 86.11 from 86.09 pence
West Texas Intermediate crude: rose 0.5 percent to $79.66 per barrel
Brent North Sea crude: rose 0.4 percent to $84 a barrel
New York – Dow Jones: up 0.9% to 39,387.76 (close)
London – FTSE 100 index: rose 0.3 percent to 8,381.35 (close)
dan/cwl
#Asian #markets #rise #data #boosts #interest #rate #hopes