Asian stocks opened higher on Monday after U.S. jobs data bolstered optimism in the world’s largest economy, all but firming an interest rate increase from the Federal Reserve later this month. The dollar was steady with Treasury yields.
While shares rose in Japan, Australia and South Korea, and Hong Kong futures advanced, the shadow of a trade war may keep exuberance in check. China warned it will withdraw from commitments it made on trade if U.S. President Donald Trump carries out a separate threat to impose tariffs on the Asian country, while the U.S. is headed for a showdown with America’s allies at a Group of Seven summit this week. The 10-year Treasury yield held around 2.90 percent as investors turned their attention to the pace of Fed rate hikes.
The U.S. jobs data was a welcome relief for traders after a tumultuous week dominated by fears about the prospect of another euro-area crisis. Much of that seemed to have dissipated as the week ended — in Italy, nationalist parties finally took power ending months of deadlock, while in Spain, the Socialist led-opposition ousted Spanish Prime Minister Mariano Rajoy with a no-confidence vote Friday.
With concerns about the euro area somewhat assuaged and emerging markets settling down after the recent sell-off, attention this week turns back to trade. The Group of Seven meets in Quebec later this week, with the European Union and Canada threatening retaliatory measures unless Trump reverses course on new steel and aluminum levies.
Elsewhere, West Texas Intermediate crude was little changed after declining as rising U.S. output overshadowed a surprise drop in stockpiles, with traders also focused on whether Saudi Arabia and Russia will boost production. In Europe, stocks had the largest gain in a month after Italy’s populist parties grabbed power, ending a three-month political gridlock.
Terminal users can read more in Bloomberg’s Markets Live blog.
These are some key events to watch this week:
- Apple Worldwide Developers Conference in San Jose, California, kicks off Monday. The company is expected to unveil projects such as new versions of iPhone and Mac operating systems.
- Australia retail sales are due Monday as well as Indonesia CPI.
- Reserve Bank of Australia monetary policy decision is out Tuesday.
- Tesla holds its annual shareholder meeting also Tuesday.
- U.S. ISM non-manufacturing index out Tuesday. Growth at U.S. service industries probably improved in May for the first time in four months, indicating the economy is strengthening after a first-quarter slowdown, economists forecast.
- Reserve Bank of India rate decision on Wednesday.
- U.S. trade balance and Australia GDP also out on Wednesday.
- On Thursday, Japanese Prime Minister Shinzo Abe meets with U.S. President Trump at the White House to discuss the planned U.S. summit with North Korea’s Kim Jong Un.
- Also on Thursday, euro-zone GDP, Australia trade.
- Turkey rate decision is due on Thursday.
- Group of Seven Leaders’ Summit starts in Quebec Friday through to June 9.
These are the main moves in markets:
- The Topix index climbed 1.1 percent as of 9:05 a.m. in Tokyo.
- Australia’s S&P/ASX 200 Index gained 0.4 percent.
- South Korea’s Kospi index was up 0.4 percent.
- Hang Seng Index futures added 0.5 percent.
- S&P 500 Index futures were little changed. The S&P 500 climbed 1.1 percent Friday.
- The Bloomberg Dollar Spot Index nudged lower. It rose for a seventh week last week.
- The Japanese yen fell 0.1 percent to 109.66 per dollar.
- The euro gained 0.1 percent to $1.1673.
- The yield on 10-year Treasuries ticked higher to 2.91 percent after adding four basis points on Friday.
- West Texas Intermediate crude was flat at $65.81 a barrel. It lost 1.8 percent Friday.
- Gold was little changed at $1,293.11 an ounce.