Asian Stock Futures Supported by Surprise US Jobs
Asian stocks are likely to get support from US data showing the country’s labor market is holding up despite concerns about risks stemming from President Donald Trump’s tariff war. US stocks and the dollar rose.
Equity index futures pointed to gains in Sydney, Tokyo and Hong Kong, after a surge in tech giants helped the S&P 500 rise 0.6%. Just days ahead of the US payrolls report, an unexpected increase in job openings buoyed sentiment, helping offset earlier losses after the OECD said Trump’s aggressive trade policies had pushed the world economy into a slump, with the US among the hardest hit.
The increase in job openings reinforced the Federal Reserve’s assertion that the labor market is in a good place. While some economists have feared a more pronounced weakening in coming months under the burden of tariffs, that has not shown up in the data, supporting officials’ stance on keeping interest rates steady.
The higher-than-expected job openings “are a good sign for the economy, as many have been concerned that tariff uncertainty is weighing too heavily on businesses,” said Chris Zaccarelli at Northlight Asset Management.
Swaps markets continue to price in two Federal Reserve interest rate cuts this year, starting in October. But traders are ramping up bets to hedge against a dramatic shift in that path as questions persist about the economic impact of the Trump administration’s policies.
On the trade front, the U.S. reiterated that Trump and Chinese President Xi Jinping will speak “soon.” The administration is actively monitoring China’s compliance with the Geneva trade agreement, White House Press Secretary Karoline Leavitt said. The U.S. Trade Representative’s office has sent letters to trading partners reminding them of upcoming deadlines in the negotiations, according to the White House. Commerce Secretary Howard Lutnick said he was “cautiously optimistic” about the prospects for a deal between the U.S. and India.
In South Korea, opposition candidate Lee Jae-myung is likely to call Trump on Wednesday, having won a presidential election that is expected to mark a turning point for the country after six months of turmoil. Lee said policymakers should not rush into a deal with the U.S.
Meanwhile, Trump signed an executive order raising tariffs on steel and aluminum to 50% from 25% starting Wednesday, following through on a pledge to increase import taxes to help domestic manufacturers. Prices of the metals jumped in the U.S. on Monday.
Source: Bloomberg
