GLOBAL MARKETS – Asia shares 3-month highs, caution ahead of US payrolls

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SYDNEY, June 3 (Reuters) – Asian stocks were slightly lower from a recent three-month high on Thursday, with China somewhat weaker as investors weighed in inflation concerns ahead of key US economic data as oil prices have risen to almost a year and a half. Tops.

The largest MSCI index of Asia-Pacific stocks excluding Japan rose 0.3% to 711 points. It hit 712.57 on Wednesday, a level not seen since early March.

Japan’s Nikkei added 0.4%. Australian stocks hit all-time highs as investors applauded stronger-than-expected economic growth data released on Wednesday.

Chinese stocks were slightly weaker.

As broad stock markets remain near record highs, the momentum seen earlier in the year has run out of steam as investors begin to worry that a stronger-than-expected rebound from COVID-19 will mean higher inflation and a tightening of monetary policy sooner than expected.

A weekly unemployment report and May private wage data on Thursday will be followed by monthly employment figures on Friday, as investors look for signs of an economic rebound and rising inflation.

Adding to inflationary fears, oil prices reached their highest level in a year and a half, due to the decision of major producing countries to restore supply only gradually, while the slowness of nuclear negotiations between the states- United and Iran also helped.

The US Federal Reserve released its “Beige Book” report, which highlighted labor shortages and inflationary pressures.

Investment managers are also growing in concern, with BlackRock’s latest founder Larry Fink warning that the market is underestimating the risk of higher inflation.

Philadelphia Fed Chairman Patrick Harker also reiterated his call that “maybe it’s time to at least think about cutting our $ 120 billion in monthly treasury bond and bank-backed securities purchases. mortgage claims “.

The Fed has already announced that it will begin unwinding holdings of corporate bonds it acquired last year to calm credit markets at the height of the pandemic.

In Australia, the central bank is also expected to start scaling back its emergency pandemic stimulus from next month, when investors believe it would announce it would not extend its three-year return target beyond the April 2024 obligation.

Major Wall Street indexes ended Wednesday’s session on a mixed note despite a mind-boggling rally from the operator of the movie chain AMC Entertainment Holdings, whose price nearly doubled on Wednesday, raising a group of preferred shares by investors individuals on forums such as Reddit’s WallStreetBets.

“It looks like there is some foam, particularly on the retail side, which may be part of the cautiousness seen in the broader stock market ahead of non-farm wages on Friday,” Tapas Strickland said. , economist at the National Australia Bank.

The surge in retail stocks comes as investors are still not convinced by assurances from the central bank that the current surge in inflation is transitory.

Movements in the forex markets were limited, with the dollar index and other major pairs remaining within narrow ranges.

The dollar index, which measures the greenback against a basket of major currencies, held steady at 89.899, not far from a five-month low of 89.535 reached last week. The Japanese yen barely changed at 109.65 to the dollar.

The Canadian dollar and Norwegian krone have outperformed in the past 24 hours due to higher oil prices.

At the other end of the scale, the New Zealand dollar lagged, down 0.2%. The Aussie was little changed at $ 0.7749.

Brent rose 24 cents to settle at $ 71.59 a barrel, its highest level since January 2020.

U.S. West Texas Intermediate (WTI) crude rose 25 cents to $ 69.08 per barrel, its highest level since October 2018.

(Edited by Sam Holmes)


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