GLOBAL MARKETS – Asian stocks fall as US jobs stunner hammers bonds

* Asian stock exchanges:

* Nikkei Slips, Wall St Futures Flat; China is jumping

* Bonds deteriorated after U.S. jobs stun, CPI looms

* The euro keeps its gain after the hawkish turn of the ECB

By Wayne Cole

SYDNEY, Feb 7 (Reuters) – Asian stock markets generally eased on Monday after incredibly strong U.S. jobs data eased worries about the global economy but also raised the risk of a aggressive tightening by the Federal Reserve.

Geopolitics also remained a concern as the White House warned that Russia could invade Ukraine any day and French President Emmanuel Macron prepared for a trip to Moscow.

The cautious mood saw the broadest MSCI index of Asia-Pacific stocks outside of Japan plunge 0.1% in early trade. Japan’s Nikkei fell 0.9% and South Korea’s 0.8%.

Chinese markets came back from the Lunar New Year break with a rebound, with the blue chip CSI300 and the Shanghai Composite both up around 2% in morning trading, catching up on last week’s gains on the global stocks. The Hang Seng, who returned from the break on Friday, was flat.

S&P 500 and Nasdaq futures both fell slightly, after last week’s market turmoil saw Inc gain nearly $200 billion while Facebook owner Meta Platforms Inc , lost as much.

BofA analyst Savita Subramanian noted that the company’s forecast for 2022 had weakened significantly, with most stocks falling following earnings reports.

“Comments suggest worsening labor shortages and supply chain issues, with more headwind expected in the first quarter than in the fourth,” Subramanian said in a note. Since wages are the main cost component for companies, the pressure on margins was to continue.

January’s payrolls report showed annual growth in average hourly wages fell from 4.9% to 5.7%, while payrolls in previous months were revised up by 709,000 to change radically the hiring trend.

“The report not only indicated that the payroll was far higher than anyone could have imagined, but there was exceptional strength in earnings, which must add to growing concern among Fed officials about the pressure to the upside on inflation,” said Kevin Cummins, chief U.S. economist at NatWest Markets. .

Consumer price figures for January are due on Thursday and could well show core inflation accelerating at the fastest pace since 1982 to 5.9%.

As a result, the markets decided to price-fix with a one-in-three chance that the Fed could hike 50 basis points in March and the real rate outlook hitting 1.5% by the end of the year.

That sent two-year yields up 15 basis points for the week, the biggest rise since late 2019, and they last stood at 1.327%.

In currency markets, the euro continued to enjoy the glow of a newly hawkish European Central Bank as markets brought forward the likely timing of a first rate hike and propelled bond yields sharply higher.

Klaas Knot, president of the Dutch central bank and member of the ECB’s governing council, said on Sunday that he expects a rise in the fourth quarter of this year.

The single currency was in sight at $1.1456, having surged 2.7% last week in its best performance since early 2020. Technically, a break of resistance around $1.1482 would open the way for 1, $1600 and up.

The dollar fared better against the Japanese yen as the market still sees little chance of the Bank of Japan tightening this year. It was flat at 115.27 yen, while the euro was up at 132.06 yen after climbing 2.7% last week.

The euro’s wild swing left the US dollar index down at 95.436, after losing 1.8% last week.

Gold was a bit firmer at $1,808 an ounce, but is struggling to weather higher bond yields.

Oil prices rose near seven-year highs amid supply concerns due to freezing weather in the United States and ongoing political unrest among the world’s major producers.

Brent added another 32 cents to $92.97 a barrel, while U.S. crude rose 42 cents to $91.89.

(Additional reporting by Tom Westbrook. Editing by Sam Holmes and Lincoln Feast.)

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