Asian shares near two-month highs before U.S. payrolls test

Asian shares hovered near two-month highs on Friday as investors braced for U.S. employment data, a key release that could stoke or temper market expectations about aggressive policy easing by the Federal Reserve.

Asian Shares

  • MSCI’s broadest index of Asia-Pacific shares outside Japan was set for its fifth straight weekly rise, which took it to 534.40, the highest since early May. It was last a tick lower at 532.65.
  • Japan’s Nikkei (N225) added 0.2%. Chinese shares were slightly higher
  • The blue-chip index (CSI300) up 0.5%. Australia and New Zealand shares gained, too, while Hong Kong’s Hang Seng index (HSI) and South Korea’s KOSPI were mostly steady.

Bonds

  • Germany’s 10-year government bond yield (DE10YT=RR), a benchmark for euro zone debt, fell to minus 0.4% and matched the European Central Bank’s deposit rate for the first time – a sign that markets are expecting rate cuts.
  • Yields on U.S. 10-year Treasuries (US10YT=RR) hit their lowest since November 2016 at 1.946%.

Currency Market

The currency market was mostly sidelined ahead of the U.S. jobs figures.

  • The dollar index, which measures the greenback against a basket of major currencies, fell 1.7% last month as investors priced in a 50-basis-point cut from the Fed.
  • A weaker greenback and soaring prices of iron ore – Australia’s top export earner – have boosted the Aussie dollar despite a rate cut on Tuesday. The currency is so far up 1.4% this week and last held at $0.7025.
  • Against the Japanese yen , the dollar gained 0.1% to 107.92.
  • The euro traded at $1.1273 (EUR=), a touch higher from its two-week low of $1.1268 seen on Wednesday.

Commodity Markets

  • In commodity markets, oil prices eased with Brent crude futures (LCOc1), the international benchmark for oil prices, off 11 cents at $63.19 per barrel while U.S. crude slipped 65 cents to $56.71.
  • Spot gold fell 0.1% to $1,413.76 an ounce.

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