- Asian share markets rose on Monday, tracking Wall Street gains after a weaker-than-expected US jobs report reduced expectations of a near-term Fed rate hike. Japan’s Nikkei 225 gained 0.6%, South Korea’s Kospi rose 0.5%, and MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3%.
- Oil prices moved higher as uncertainty over the reopening of the Strait of Hormuz persisted. Brent crude futures rose 0.9% to $84.32 a barrel, while US West Texas Intermediate crude gained 0.7% to $78.74 a barrel.
- US jobs report was weaker than expected, reducing the probability of a September rate hike to around 44%, down sharply from 67% a week ago.
- Iran stated that an agreement with Oman to define new shipping lanes through the Strait of Hormuz was in its final stages, but reiterated that the waterway would reopen only after the United States met other conditions.
- Attention has turned to the US consumer price index report due on Wednesday, with analysts expecting headline consumer prices to rise 0.1% in July.
Asian stocks experienced a notable rise on Monday, driven by significant gains in Japan and South Korea, following Wall Street's record close.
Japan's Nikkei 225 gained 0.6% and South Korea's Kospi rose 0.5%, as investors reacted to a weaker-than-expected U.S. jobs report that reduced the likelihood of a near-term Federal Reserve rate hike.
The report indicated that U.S. employers unexpectedly cut jobs in July, leading to a drop in the probability of a September rate hike to about 44%, down from roughly 67% a week earlier.
Oil prices also climbed, with Brent crude futures rising 0.9% to $84.32 a barrel, amid ongoing tensions in the Strait of Hormuz.
Iran announced that a deal with Oman to define new shipping lanes was nearing completion, but reiterated that the strait would only reopen after the U.S. met additional conditions.
Corporate earnings have provided strong support for U.S. equities, with nearly 90% of S&P 500 companies reporting a 30% increase in earnings per share from a year earlier, excluding investment gains at Alphabet and Amazon.
Analysts are now closely watching the upcoming U.S. consumer price index report, with expectations of a 0.1% rise in headline consumer prices for July, which could influence future rate hike expectations.
“Futures market now sees a 44% probability of a September Fed rate hike, down from 67% a week ago. Attention turns to Wednesday's US CPI report, with analysts expecting a 0.1% rise in headline prices and a 0.2% core increase.”
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