Connect with us

Markets

Asian Shares Rise as Upbeat U.S. Jobs Data Offsets Trade Worries

Published

on

Asian stocks
  • Asian Shares Rise as Upbeat U.S. Jobs Data Offsets Trade Worries

Asian shares rose to their highest in two-and-a-half-weeks on Monday as strong U.S. jobs data offset worries that tariff wars between the United States and the rest of the world could retard global economic growth.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.0 percent to a high last seen on May 17, while Japan’s Nikkei rose 1.3 percent.

Tech names such as Tencent and Taiwan Semiconductor Manufacturing were among the biggest gainers.

European stocks are seen rising, with spread-betters expecting Britain’s FTSE and Germany’s Dax to gain 0.3 percent and France’s Cac 0.4 percent.

On Wall Street on Friday, U.S. tech shares soared, pushing up the Nasdaq Composite 1.51 percent to 7,554 points, near its record closing high of 7,588 struck in March.

In contrast, the S&P 500, which rose 1.08 percent on Friday, was still about 140 points off a record peak of 2,872 set in January due to concerns over trade frictions.

Finance leaders of the closest U.S. allies vented anger over the Trump administration’s metal import tariffs on Saturday, setting the tone for a heated G7 summit next week in Quebec.

In a rare show of division among the normally harmonious club of wealthy nations, six G7 member countries issued a statement asking U.S. Treasury Secretary Steven Mnuchin to convey their “unanimous concern and disappointment” to President Donald Trump.

“The G7 is showing more divisions than unity, to the point where one has to wonder whether it is worth holding meetings,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

“The G7 summit this weekend could be equally terrible. There’s even talk that Trump may not go. Concerns on trade frictions are likely to continue to weigh on markets,” he added.

There appears to have been no major break-through on trade disputes after U.S. Commerce Secretary Wilbur Ross met Chinese Vice Premier Liu He, either.

China warned the United States on Sunday that any agreements reached on trade and business between the two countries will be void if Washington implements tariffs and other trade measures, as the two ended their latest round of talks in Beijing.

Still, the U.S. economy’s current strength kept bears at bay for the moment.

Data released on Friday showed U.S. job growth accelerated in May and the unemployment rate dropped to an 18-year low of 3.8 percent, indicating a rapidly tightening labour market, which could eventually fuel inflation.

“We had strong headline figures on employment but rise in wages was still well-contained and did not point to a sharp acceleration in inflation,” Hirokazu Kabeya, chief global strategist at Daiwa Securities.

Average hourly earnings rose eight cents, or 0.3 percent last month after edging up 0.1 percent in April. That pushed the annual increase in average hourly earnings to 2.7 percent from 2.6 percent in April.

The strong employment report added to a string of upbeat economic data, including consumer spending, industrial production and construction spending.

They have suggested economic growth was regaining speed early in the second quarter after expanding at a moderate 2.2 percent annualised rate in the January-March period.

Given the strength, the Federal Reserve is all but certain to raise interest rates at its policy meeting next week.

That supported the dollar against other currencies.

The U.S. currency traded at 109.50 yen, having gained 0.6 percent on Friday, extending its rebound from Tuesday’s low of 108.115, its lowest level in over five weeks.

The euro traded at $1.1665, off Thursday’s high of $1.1725. Still, it kept some distance from Tuesday’s 10-month low of $1.1510 as concerns over Italy’s political crisis have eased.

U.S. crude futures fell as low as $65.51 per barrel on Friday, touching their lowest level in almost two months. Rising U.S. crude production and a glut trapped inland due to a lack of pipeline capacity have pressured prices.

U.S. crude futures last traded at $65.71, down 0.15 percent. Global benchmark Brent was down 0.44 percent, at $76.45.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Crude Oil

Oil Prices Dip Amidst Middle East Tensions, Market Reaction Limited

Published

on

Oil

Oil prices fell on Monday as market participants reevaluated their risk premiums in the wake of Iran’s weekend attack on Israel, which the Israeli government said caused limited damage.

Brent crude oil, against which Nigerian oil is priced,  dipped by 50 cents, or 0.5%, to $89.95 a barrel while West Texas Intermediate (WTI) oil fell by 52 cents, or 0.6%, to $85.14 a barrel.

The attack, involving over 300 missiles and drones, marked the first assault on Israel from another country in more than three decades. It heightened concerns over a potential broader regional conflict impacting oil traffic through the Middle East.

However, Israel’s Iron Dome defense system intercepted many of the missiles, and the attack resulted in only modest damage and no reported loss of life.

Warren Patterson, head of commodities strategy at ING, noted that the market had largely priced in the potential attack in the days leading up to it. The limited damage and the absence of casualties suggest that Israel’s response may be more measured, which could help stabilize the oil market.

Iran, a major oil producer within OPEC, currently produces over 3 million barrels per day (bpd) of crude oil. The potential risks include stricter enforcement of oil sanctions and the possibility of Israeli targeting of Iran’s energy infrastructure, according to ING.

Nevertheless, OPEC possesses over 5 million bpd of spare production capacity, which could help mitigate any supply disruptions.

Analysts from ANZ Research and Citi Research have suggested that further significant impact on oil prices would require a material disruption to supply, such as constraints on shipping in the Strait of Hormuz. So far, the Israel-Hamas conflict has not had a notable effect on oil supply.

The market remains watchful of Israel’s response to the attack, which could influence the future trajectory of oil prices and broader geopolitical tensions in the region.

Continue Reading

Crude Oil

Nigeria’s Crude Oil Production Falls for Second Consecutive Month, OPEC Reports

Published

on

Crude Oil

Nigeria’s crude oil production declined for the second consecutive month in March, according to the latest report from the Organization of Petroleum Exporting Countries (OPEC).

Data obtained from OPEC’s Monthly Oil Market Report for April 2024 reveals that Nigeria’s crude oil production depreciated from 1.322 million barrels per day (mbpd) in February to 1.231 mbpd in March.

This decline underscores the challenges faced by Africa’s largest oil-producing nation in maintaining consistent output levels.

Despite efforts to stabilize production, Nigeria has struggled to curb the impact of oil theft and pipeline vandalism, which continue to plague the industry.

The theft and sabotage of oil infrastructure have resulted in significant disruptions, contributing to the decline in crude oil production observed in recent months.

The Nigerian National Petroleum Company Limited (NNPCL) recently disclosed alarming statistics regarding oil theft incidents in the country.

According to reports, the NNPCL recorded 155 oil theft incidents within a single week, these incidents included illegal pipeline connections, refinery operations, vessel infractions, and oil spills, among others.

The persistent menace of oil theft poses a considerable threat to Nigeria’s economy and its position as a key player in the global oil market.

The illicit activities not only lead to revenue losses for the government but also disrupt the operations of oil companies and undermine investor confidence in the sector.

In response to the escalating problem, the Nigerian government has intensified efforts to combat oil theft and vandalism.

However, addressing these challenges requires a multi-faceted approach, including enhanced security measures, regulatory reforms, and community engagement initiatives.

Continue Reading

Crude Oil

Oil Prices Edge Higher Amidst Fear of Middle East Conflict

Published

on

Crude Oil

Amidst growing apprehensions of a potential conflict in the Middle East, oil prices have inched higher as investors anticipate a strike from Iran.

The specter of a showdown between Iran or its proxies and Israel has sent tremors across the oil market as traders brace for possible supply disruptions in the region.

Brent crude oil climbed above the $90 price level following a 1.1% gain on Wednesday while West Texas Intermediate (WTI) hovered near $86.

The anticipation of a strike, believed to be imminent by the United States and its allies, has cast a shadow over market sentiment. Such an escalation would follow Iran’s recent threat to retaliate against Israel for an attack on a diplomatic compound in Syria.

The trajectory of oil prices this year has been heavily influenced by geopolitical tensions and supply dynamics. Geopolitical unrest, coupled with ongoing OPEC+ supply cuts, has propelled oil prices nearly 18% higher since the beginning of the year.

However, this upward momentum is tempered by concerns such as swelling US crude stockpiles, now at their highest since July, and the impact of a hot US inflation print on Federal Reserve rate-cut expectations.

Despite the bullish sentiment prevailing among many of the world’s top traders and Wall Street banks, with some envisioning a return to $100 for the global benchmark, caution lingers.

Macquarie Group has cautioned that Brent could enter a bear market in the second half of the year if geopolitical events fail to materialize into actual supply disruptions.

“The current geopolitical environment continues to provide support to oil prices,” remarked Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. However, he added, “further upside is limited without a fresh catalyst or further escalation in the Middle East.”

The rhetoric from Iran’s Supreme Leader, Ayatollah Ali Khamenei, reaffirming a vow to retaliate against Israel, has only heightened tensions in the region.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending