Following a robust jobs report from the US, indicating a thriving economy, Asian stock markets are expected to see gains, mirroring Wall Street's upward trajectory. This comes as China resumes trading after a brief holiday break.
Equity futures across Australia, Japan, and Hong Kong have shown positive movement, with US stock contracts also inching higher during early Asian trade. This follows substantial gains in the S&P 500 and Nasdaq 100 indexes, which both rose over 1% last Friday.
The surge in Treasury yields reflects a recalibration of expectations around Federal Reserve rate cuts this year, spurred by strong US payroll data. The data revealed a dip in the unemployment rate to 3.8%, robust wage growth, and an increase in workforce participation, all signaling a resilient labor market that continues to bolster the economy.
Market strategists suggest that the compelling employment figures support the notion of a reaccelerating US economy and further underscore the country's economic prowess. The growth rate remains above the Federal Reserve's benchmark for a non-inflationary pace, indicating sustained economic strength.
Attention in Asia is particularly focused on China's daily yuan reference rate as the markets reopen. Investors are keen on discerning any signs of intervention by Beijing to counter the currency's recent depreciation, which could indicate a shift towards more aggressive support or a tolerance for moderate weakening.
The upcoming US inflation data for March is also in the spotlight, potentially maintaining levels above the Federal Reserve's target. This coincides with the beginning of the corporate earnings season, with major banks such as JPMorgan Chase & Co. and Citigroup Inc. set to release their quarterly results.
Amid anticipations of reduced Federal Reserve rate cuts, investors are cautiously adjusting their positions, as evidenced by the recent peak in the Cboe Volatility Index (VIX). This comes after the S&P 500 Index recorded its first weekly decline in three weeks.
Internationally, the Reserve Bank of New Zealand is expected to counteract expectations of policy easing in its upcoming decision. Similarly, the European Central Bank is likely to maintain its key rate, with market participants eyeing potential rate reductions in the coming months.
In the commodities market, oil prices have retreated after six consecutive sessions of gains, and gold has also seen a decrease following a surge to record highs last week.
Notable events this week include various global central bank decisions, key economic indicators, and corporate earnings announcements, promising a week full of potential market-moving developments.
