Asian stocks are reporting moderate gains on the first trading of the week after Friday’s US jobs data validated Fed’s dovish turn.
As of writing, the likes of Japan’s Nikkei and Australia’s S&P/ASX 200 are up 0.43 and 0.48 percent, respectively. Meanwhile, Hong Kong stocks are little changed and India’s Sensex is down 0.35 percent. Chinese markets are closed this week for the Lunar New Year holiday.
A US Labor Department report on Friday showed nonfarm payrolls jumped by a stronger-than-forecast 304,000 jobs last month, the largest gain since February 2018, according to Reuters. The average weekly earnings, however, rose a meager 0.1 percent, missing the expected 0.3 percent rise by a big margin.
The anemic wage-price inflation, as indicated by the average weekly earnings, validates Fed’s patience on rates. Put simply, the US economy has found a sweet spot of soaring jobs and weak inflation and that is boding well for the Asian equities.
Possibly adding to the bid tone around risky assets are fading US-China trade tensions. A top US negotiator on Thursday reported “substantial progress” in two days of high-level talks on trade with China.
In FX markets, the greenback is mildly bid, possibly due to the above-forecast payrolls release. The USD/JPY pair is looking north, having witnessed a falling channel breakout a few minutes ago. Meanwhile, EUR/USD is trading below the 100-day moving average, having seen two-way business last month.
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