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Stock rally on expected Fed rate cuts; Euro on defensive by Reuters



© Reuters. People look at an electronic board showing stock information at a brokerage in Shanghai

By Tomo Uetake

TOKYO (Reuters) – Asian stocks advanced Thursday and track strong gains on Wall Street as weak US economic data strengthened MSCI's widest index for Asia-Pacific shares outside Japan () increased by 0.4%, while Japan's Nikkei () and Australian benchmark () rose by 0.3% and 0.6

European stocks are ready for a marginally higher open , with futures for Britain's FTSE () () (0.1

%) and Germany's DAX () () up in a tap.

On Wall Street, which stopped for dinner on Wednesday for the Independence Day, all three major stock indices were finished at record highs, as Fed political relief expectations increased. ()

A report from a payroll prosecutor ADP (NASDAQ 🙂 showed that US companies added jobs in June, but fewer than analysts expected. Growth related to the labor market is softer, although the current US expansion marked a record run last month.

"Shares and bonds are accumulating as markets target interest rate cuts by the European Central Bank and the US Federal Reserve," said Noriko Miyoshi, head of interest-bearing assets of Simplex Asset Management in Tokyo.

"The pace looks too fast. Investors around the world rushed to participate in the game of hunting," she said.

Global government bonds were collected overnight. The 10-year government bond yield went to 1.939% (), a level most recently observed after Donald Trump's presidential election in November 2016.

Most 10-year euro area bond yields (), (), (), () hit to record the downturn on Wednesday when investors bet that the ECB's bold stance would continue, while the 10-year German Bund yield fell to minus 0.399% (), flirting with the ECB's minus 0.40 deposit rate.

EU leaders' nomination of Christine Lagarde, head of the International Monetary Fund, to replace Mario Draghi as president of the ECB, reinforced expectations of more monetary easing if needed.

The 10-year Italian bond yield hit 1.599% (), the lowest since October 2016, when the government eases its budget ambitions.

The market's focus is now on Friday's US non-farm wage for June, which the economists expect to have increased by 160,000 in June compared to 75,000 in May.

In the foreign exchange market, the euro traded at $ 1,1284 (), close to its two-week low of $ 1,1268 set last day. The dollar was slightly changed at 107.80 yen and lost steam as the fall this week in US bond yields. The British pound stood at $ 1,2584 after hitting a two-week low of $ 1,2557 as financial data boosted expectations that the Bank of England would join the central bank's counterparts to lower interest rates to vomit. aggravated economic perspective.

Chinese stocks in the mainland drifted to negative territory in connection with trade uncertainty in the US and China and a Trump commentary on alleged currency impact, with the Shanghai Composite () reduced by 0.2% and CSI 300 () with a 0.3% reduction. Hong Kong's Hang Seng () edged 0.1% higher.

In a Wednesday receipt, Trump repeated his call to the United States to match China and Europe's "big currency manipulation game" and pump money into their economies.

The United States Commerce Department said on Wednesday that licensing requests from US companies wishing to export products to China's Huawei Technologies [HWT.UL] were "under the highest national security review", suggesting that applications are facing a rigid obstacle to approval.

United States and China top representatives, on the other hand, meet in the coming week to continue talks between the world's largest economies, White House advisor Larry Kudlow said on Wednesday.

In commodities, oil prices fall down on Thursday after there have been good results the day before, the pressure of data showing a less than expected decline in US raw stocks. [O/R]

Burned raw futures last month (), the international benchmark for oil prices, was down 0.7% at $ 63.38 per barrel, while US Western Texas Intermediate (WTI) crude futures () were down 0 , 7% at $ 56.97 per. barrel.

Gold prices were little changed on Thursday after having a week-high of $ 1,435.99 in the previous session, as stock market gains offset the support of a weaker dollar and US price hikes. ()


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