Sydney Asian stocks went up on Thursday because the dollar was shaky before the U.S. non-farm payrolls report, and oil prices went up for the fourth day in a row after OPEC+ members promised to cut production by a lot.
The gains are likely to spread to markets in Europe, where the Euro Stoxx 50 futures are up 1.4% and the FTSE futures are up 0.7%.
MSCI’s broadest index of Asia-Pacific stocks outside of Japan went up by 0.7%, making it the third day in a row that it went up. After a huge 13% drop in September, it went up 4.5% this week.
Related: Asian stocks go up, but futures show that the rise might not last long.
Japan’s Nikkei stock index went up 1.0% to its highest level since late September. Energy and chip-related stocks were the main reasons for the rise. South Korea’s stock market went up 1.5%, while Australian stocks went from down 0.1% to up 0.1%.
The Hang Seng Index in Hong Kong also stopped falling and is now down 0.2% for the day. The markets in mainland China are still closed for the holidays.
The outlook on offshore risk remained positive. The S&P 500 futures went up 0.5% and the Nasdaq futures went up 0.7%. This was on top of a late rebound in U.S. stocks that helped limit losses from earlier.
The S&P 500 was down 0.20 percent by the end of Wednesday, and the Nasdaq Composite was down 0.25 percent.
The Refinitiv Asia Energy Index went up 1.4% after the Organization of the Petroleum Exporting Countries and its allies agreed to cut oil production by the most since the COVID-19 pandemic began. This cut supply in a market that was already tight.
The price of oil hit its highest point since the middle of September. Brent crude futures went up 0.2% to $93.51 per barrel, and U.S. West Texas Intermediate (WTI) crude futures also went up 0.2% to $87.9 per barrel.
MANY THANKS FOR THE FED PIVOT
This week, data on U.S. job openings that showed the labour market and economy were slowing, as well as a surprise move by the Reserve Bank of Australia to raise rates by only 25 basis points, gave people hope that central banks would raise interest rates less aggressively in the future. This made people more willing to take risks.
But these hopes were dashed when the ADP National Employment Report showed that private employment rose more than expected in September and the Institute for Supply Management said that the service sector shrank less than expected in September and that employment went up.
Analysts at ANZ said, “The optimism that boosted financial markets at the beginning of the week faded as U.S. data continued to show the need for more decisive central bank policy action.”
“The September report on the job market is now the centre of attention… “For a strong number, the market needs to be ready.”
On Friday, the U.S. non-farm payrolls report will be released. According to a poll by Reuters, analysts expect that 250,000 jobs were added last month and that the unemployment rate will be 3.7%.
Overnight, Mary Daly, president of the Federal Reserve Bank of San Francisco, stressed that the U.S. central bank is committed to lowering inflation through more interest rate hikes. However, she also said that the Fed won’t just keep raising rates if the economy starts to slow down.
Related: After the BOE steps in, Asian stocks go up, but the pound rally loses steam.
Raphael Bostic, president of the Atlanta Fed, said that the U.S. Federal Reserve’s fight against inflation is probably “still in its early stages.”
On Thursday, the dollar fell 0.3% against a basket of major currencies after rising 0.7% the night before because of comments from Fed officials that were seen as hawkish.
After going up overnight, U.S. Treasury yields were mostly the same.
At 3.7471%, the yield on benchmark ten-year notes was mostly the same, and at 4.1562%, the yield on two-year notes was stable.
Gold was a bit more expensive. The price of spot gold was $1,723.4489 per ounce. [GOL/]
