Asian stocks rose, with the regional index posting its longest run of weekly gains since 2012, while bond risk fell as U.S. jobs growth bolstered the outlook for the world’s largest economy. Malaysia’s ringgit strengthened as copper headed for its biggest weekly jump since September.
The MSCI Asia Pacific Index increased 0.4 percent by 7:04 a.m. in London, adding 1.8 percent in its steepest weekly climb in three months. Futures on the Euro Stoxx 50 Index and the Dow Jones Industrial Average (INDU) futures were little changed after the U.S. gauge topped 17,000 for the first time before today’s U.S. holiday. Asian bond risk fell a third day and Indonesia’s rupiah surged before next week’s presidential vote.
Stocks are climbing after growth in U.S. payrolls exceeded economists’ estimates and the jobless rate sank to an almost six-year low, spurring optimism the global economy will accelerate. European Central Bank chief Mario Draghi said yesterday borrowing costs will stay near zero for an extended period after the introduction of unprecedented stimulus in June. Malaysian trade data is due for release today.
“The jobs report was a positive surprise and it confirmed the ongoing recovery in the U.S. labor market,” Masaaki Yamaguchi, an equity markets strategist at Nomura Holdings Inc., Japan’s biggest brokerage by market value, said by phone. “That’s adding a tailwind to the market.”
The Topix rose for the fourth time in five days and was set for its highest close since Jan. 23. Its 2.5 percent gain this week was the most among Asian developed markets. The Nikkei 225 Stock Average added 0.6 percent. The Hang Seng Index was little changed, poised for a weekly gain of 1.5 percent.
Australia’s S&P/ASX 200 Index gained 0.7 percent, headed for its highest close since April 28 and the biggest weekly advance since February, up 1.5 percent. HTC Corp. (2498), maker of the M8 smartphone, rose 2.6 percent in Taipei after posting second-quarter earnings that exceeded analyst estimates.
U.S. employers added 288,000 workers to nonfarm payrolls in June, following a 224,000 increase in May that was bigger than previously estimated and beating the median economist projection for an advance of 215,000. A 1.39 million increase in employment over the past six months was the largest since early 2006, while the unemployment rate fell to 6.1 percent, the lowest level since September 2008.
“There was relief for the economic bulls in the U.S.,” Cameron Bagrie, chief economist in Wellington at ANZ Bank New Zealand Ltd., wrote in a client note today. “We can expect debate at the Fed Open Market Committee on the appropriate settings for monetary policy to intensify, though we suspect the Fed will be slow to change its guidance and any shifts will be in a gradual fashion.”
MSCI’s All-Country World Index of global shares rose 0.1 percent for a seventh day of increases, set to close at a record. The Dow added 0.5 percent to 17,068.26 yesterday and the Standard & Poor’s 500 Index rose 0.6 percent to a record 1,985.44 as U.S. equities markets closed at 1 p.m. ahead of today’s Independence Day holiday.
The Markit iTraxx Asia index of credit-default swaps fell 1.5 basis points to 99 basis points, poised to match its lowest level since June 24, according to data from CMA.
Yields on Australian government bonds due in a decade rose for the first time in three days, adding five basis points, or 0.05 percentage point, to 3.59 percent. Similar-maturity New Zealand notes yielded 4.50 percent, up three basis points.
Rates on 10-year Treasury notes rose a third day in New York, adding one basis point to 2.64 percent, the highest close since June 17. Traders boosted odds to almost even that Fed Chair Janet Yellen and her policy makers will judge the economy resilient enough to raise key borrowing costs by next June.
Yellen said June 18 that the Fed planned to hold benchmark rates near zero for a “considerable time” as slack in the jobs market kept inflation below the central bank’s 2 percent target. The Fed has kept the key rate near zero since December 2008.
Chinese equities headed for a second straight weekly advance on signs the economy is improving.
Zhejiang Hangzhou Xinfu Pharmaceutical Co. jumped by the 10 percent daily limit after gaining conditional regulatory approval to sell shares and buy assets. Rizhao Port Co. tumbled 9.4 percent to lead port operators lower.
The Shanghai Composite Index (SHCOMP) has climbed 1.2 percent this week after data showed China’s manufacturing expanded in June at the fastest pace this year and a services index increased to the highest level since March 2013. The gauge fell 0.1 percent today.
Indonesia’s rupiah rose as much as 0.4 percent. Joko Widodo, a candidate in the presidential elections, plans to allow foreigners to buy apartments in an effort to raise tax revenue, said Setyo Maharso, a member of his campaign team, in an interview yesterday.
Malaysia’s ringgit added 0.2 percent to 3.1880 per dollar, and touched the strongest level since Nov. 20 at 3.1840. The currency has gained 0.8 percent this week, the biggest advance after the Indonesian rupiah’s 1 percent climb among 12 Asian currencies tracked by Bloomberg.
The yen rose 0.2 percent to 102.03 per dollar after slipping 0.4 percent last session. Japan’s currency, regarded as a haven investment, is down 0.6 percent this week, set for its steepest weekly depreciation since the first week of June. It touched 102.27 per dollar yesterday, the weakest level since June 18.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was little changed after rising 0.2 percent in New York in a second day of gains.
The euro was steady at $1.3608 following yesterday’s 0.4 percent drop. ECB President Draghi said monetary-policy measures announced last month, which included pushing the deposit rate to negative, had led to a further easing of the policy stance with more operations in the coming months to support bank lending.
The Stoxx Europe 600 Index added 0.9 percent yesterday, capping its biggest three-day rally in 10 weeks. Germany’s factory orders fell 1.7 percent in May from April, adjusted for seasonal swings and inflation, a steeper drop than economists expected, data today showed.
Copper for three-month delivery on the London Metal Exchange traded at $7,169.25 a metric ton, headed for a 3.2 percent gain in the week. Aluminum declined 0.4 percent to $1,927.50 a ton, reducing its increase in the week to 2.3 percent.
Gold was little changed on the spot market today at $1,319.27 an ounce after sliding 0.6 percent last session and touching $1,310.03, the lowest level since June 26. The precious metal is still up 0.2 percent this week in a fifth consecutive advance, its longest rally since March.
The better-than-expected U.S. jobs data curbed demand for haven assets such as gold, said Alfonso Esparza, a senior currency analyst in Toronto at Oanda Corp. “Gold will probably now start weakening again,” he said.