Asian stocks edged higher on Monday as weaker US employment data reduced expectations of a near-term Federal Reserve rate hike, with JPMorgan chief US economist Michael Feroli saying a core CPI reading of 0.22% would probably not be enough to trigger a September hike.
However, he warned that repeated readings closer to 0.3% could change that view.
Japan’s Nikkei rose 2% while South Korea’s market gained 1.1%, tracking Wall Street’s record close after the latest US jobs data eased concerns over borrowing costs. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.8%, while Chinese blue chips slipped 0.4% after July inflation data came in below expectations, highlighting continued weakness in domestic demand.
Oil prices moved higher as uncertainty persisted over the reopening of the Strait of Hormuz. Iran said a deal with Oman on new shipping lanes was in its final stages but maintained that the waterway would only reopen once the US met additional conditions.
Brent crude rose 1% to US$84.40 a barrel while US crude gained 0.8% to US$78.80. Markets are now turning to US consumer price data due on Wednesday, with any upside surprise potentially reviving expectations of a September rate increase. Futures markets have reduced the probability of a September move to about 44% from 67% a week earlier.
Meanwhile, BofA analysts said nearly 90% of S&P 500 companies had reported earnings, with earnings per share up 30% year-on-year and a 76% beat rate matching the strongest level since 2021. They said artificial intelligence remained the standout theme, although growth is expected to slow next quarter.
Reuters
