HONG KONG (AFP)- Asian markets were mixed on Monday, after Wall Street fell sharply in response to a US jobs report that was better than expected. This gave the Federal Reserve room to keep raising interest rates as it tries to stop rising inflation.
Friday’s closely watched non-farm payroll numbers showed a slowdown in hiring, but still more jobs were created than expected. This made US traders flee the market.
That happened because more people in the government said the Federal Reserve could keep raising interest rates sharply to try to stop inflation.
But because prices are going up because of things like the war in Ukraine and the slowdown caused by China’s lockdown, there are fears that the bank’s actions could hurt the world’s biggest economy.
The rise in inflation has forced finance chiefs around the world to tighten monetary policy. The European Central Bank has said it will raise rates in July for the first time in more than a decade.
Shane Oliver, head of investment strategy and chief economist at AMP Capital, said in a note that the most important question for the markets is whether or not central banks can bring inflation under control without causing a recession.
“Short-term volatility in stocks is likely to continue as long as central banks keep tightening to fight high inflation, the war in Ukraine goes on, and fears of a recession remain.”
Wall Street’s three main indexes all ended deep in the red, with tech companies taking most of the hit. However, early trade in Asia was a little better.
Hong Kong, Tokyo, Shanghai, and Taipei all went up. Sydney, Singapore, Manila, and Jakarta, on the other hand, all went down.
Oil prices, which are a major cause of inflation, kept going up even though OPEC and other major producers said they would increase output. This wasn’t as much as the market had hoped for.
Saudi Arabia also said that it had raised the official selling price for customers in Asia. At the same time, demand expectations went up because some restrictions on COVID in China were lifted and the summer driving season in the US began.
