Asian markets rise as soft US jobs data eases Fed rate hike fears

Asian share markets rose on Monday, tracking Wall Street's record-setting session after a weaker-than-expected US jobs report reduced expectations of a near-term Federal Reserve interest rate hike. Japan's Nikkei 225 gained 0.6 percent, South Korea's Kospi rose 0.5 percent, and MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 percent. The rally came as US Treasury yields fell and investors reassessed the outlook for monetary policy following the July employment data.firstpost+1

Australia was the notable exception. The S&P/ASX 200 slipped 0.5 percent as Westpac shares fell more than 5 percent — their steepest intraday drop since March — after the lender forecast investor housing credit growth would halve next year and reported a 20 percent decline in mortgage applications. Investor attention in Australia now turns to the Reserve Bank of Australia's policy decision on Tuesday, where the cash rate is widely expected to be held at 4.35 percent, with all four major banks forecasting no change.foxbusiness+2

Soft Jobs Data Shifts Fed Calculus

The US Bureau of Labor Statistics reported that nonfarm payrolls decreased by 23,000 jobs in July, missing expectations for a gain of 83,000, while the unemployment rate edged down to 4.1 percent. The futures market now prices roughly a 44 percent probability of a September rate hike, down sharply from 67 percent a week earlier. Attention has turned to Wednesday's US consumer price index report, where analysts expect headline prices to rise 0.1 percent and core inflation to increase 0.2 percent.foxbusiness+4

Oil Climbs on Hormuz Uncertainty

Oil prices moved higher as shipping through the Strait of Hormuz remained restricted. Brent crude futures rose 0.9 percent while US West Texas Intermediate crude gained 0.7 percent. Iran said on Sunday that an agreement with Oman on new shipping lanes through the strait was near completion, but reiterated the waterway would reopen only after the United States met other conditions. The sustained rise in crude prices could complicate the Federal Reserve's efforts to bring inflation toward its target.firstpost+1

Earnings and Currency Moves

Corporate earnings continued to support US equities, with S&P 500 earnings per share up about 30 percent year-over-year, excluding investment gains at Alphabet ↘ 0.88% and Amazon Amazon.com, Inc. ↗ 0.82%, according to Bank of America analysts. The euro traded near a seven-week high against the dollar, while gold remained supported near record levels, benefiting from lower rate expectations and geopolitical uncertainty.firstpost