Employment numbers which raised optimism about the possibility of rate cuts this year
Ahead of the weekend, US stock markets were inspired by weak US jobs numbers which raised optimism about the possibility of rate cuts this year. US employers added just 175,000 jobs in April, much lower than expected. The Dow Jones rose 1.2%, the S&P 500 finished up 1.3% while the Nasdaq Composite rose 2.0%. For the week, the Dow and the Nasdaq finished up 1.1% each, while the S&P 500 tacked on 0.6%. In individual stocks, shares of Apple rallied 6% after the company announced better-than-expected earnings.
Tracking strength in Wall Street after weak payrolls data that sparked a resurgence in rate cut expectations, most Asian equities were higher at the start of the week. Still, trading volumes were muted in the region amid market holidays in Japan and South Korea. China’s Shanghai Composite index rose 1.1%, catching up to gains in its peers after a long weekend. Also, private PMI data showed continued resilience in China’s services sector.
In Europe, stocks opened higher on Monday a US jobs report revived hopes of interest rate cuts this year. The London stock exchange was closed for a bank holiday. On the data front, a S&P composite final PMI for the eurozone showed business activity in the region jumped to 51.7 for April, from 50.3 in March, thus expanding at its fastest pace in almost a year. US stock index futures were up slightly in early pre-market deals, pointing to a steadier risk mood to start the session.
Meanwhile, the US dollar struggles to attract demand so far, oscillating around the 105.00 figure after a brief dip to 104.50 on Friday for the first time since April 10. The greenback was disappointed by unexpectedly modest jobs gains along with a rise in jobless rate. However, the USD index managed to trim losses eventually. Now, the dollar needs to hold above the 105.00 figure in order to stay afloat in the near term. As risk demand persists for the time being, the buck is unlikely to stage a solid and sustained bounce in the near term.
