Home / International/ Asia stocks up after tax reform optimism lifts Wall Street, dollar buoyant

Asia stocks up after tax reform optimism lifts Wall Street, dollar buoyant


Comments / {{hitsCtrl.values.hits}} Views / Saturday, 7 October 2017 00:46


TOKYO (Reuters): Asian stocks rose on Friday after optimism over US tax reform plans lifted Wall Street shares to new highs, and the dollar hovered near a seven-week peak as new indicators pointed to solid economic growth.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3%, poised for a 1.6% gain on the week.

Japan’s Nikkei climbed 0.25% after setting a new two-year high, Australian stocks rose 0.8% and South Korea’s KOSPI advanced 0.9%.

The S&P 500 posted its sixth straight record high close on Thursday, its longest run since 1997, as investors cheered increased prospects for a tax overhaul with Congress moving closer to agreement on a budget resolution.

“We have the very first step where Congress passed the budget details, so you’re one step nearer to tax reform,” said Heng Koon How, head of markets strategy for United Overseas Bank (UOB) in Singapore.

Data out on Thursday showed the number of Americans filing for unemployment benefits fell more than expected, the trade deficit narrowing, and evidence of strong orders for core capital goods. 

The latest boost in US economic optimism lifted Treasury yields and helped take the dollar index against a basket of major currencies to the seven-week high.

US data released this week has been solid on the whole, with investor focus now turned to the closely-watched nonfarm payrolls report due at 1230 GMT.

Of key interest to the financial markets was how hurricanes Harvey and Irma may have affected the labour market in September.

“The hurricanes have made employment conditions difficult to pin down and market reaction could be limited regardless of how strong or weak the outcome is,” said Shin Kadota, senior strategist at Barclays in Tokyo.

Economists expect just 90,000 new US jobs for September, down from 156,000 in August, according to a Reuters poll.

“If the results are strong, it would enhance expectations for the Fed to raise interest rates in December. But whether expectations for rate hikes beyond December could be raised is another matter, with the Fed keeping a cautious stance on prices and with (Chair Janet) Yellen’s term ending in February,” Kadota at Barclays said.

Interest rate futures traders are now pricing in an 86% likelihood of a December rate hike, up from 78% a week ago, according to the CME Group’s FedWatch Tool.

The dollar index was effectively flat at 93.969 after rising to 93.990, its highest since Aug. 17.

The euro was steady at $1.1710 EUR= after losing 0.4% the previous day. It was on track to end 0.9% lower on the week, during which it plumbed a near two-month low of $1.1695.The dollar was little changed at 112.855 yen JPY= and on track for a weekly gain of 0.3%.



the bullish dollar after a poorly-received keynote speech by British Prime Minister Theresa May deepened market doubts about her ability to govern effectively.

Sterling retreated to a one-month low of $1.3088 GBP=D3 after sliding 1% overnight.

Falling bond prices pushed up the 10-year US Treasury yield US10YT=RR to 2.348%, nudging it back towards a three-month high of 2.371 set on Monday. The yield had momentarily dropped to 2.300% mid-week.

In commodities, Brent crude LCOc1 was down 0.2% at $56.88 a barrel.

The futures contract had surged 2.1% overnight on signs Saudi Arabia and Russia would limit production through next year, although caution towards a tropical storm heading for the Gulf of Mexico cut short the advance.


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Identifying traitors: I cannot wait until Dr. Padeniya presents his point scheme

Tuesday, 21 August 2018

Cause for excitement I am excited! A way of identifying and measuring a traitor is soon to be unveiled; by no less than the President of the GMOA! Hasn’t he also qualified in some department of neurology? All the more reason to justify my excitemen


The evils of translocating wild elephants

Tuesday, 21 August 2018

The subject of translocating wild elephants has been a much-debated topic recently, after the Department of Wildlife Conservation (DWLC), acting on the orders of the Minster for Wildlife, wanted to move the only two wild elephants habituating the Sin


Climate scientists cheating us to a $ 12 b/year economic loss in 2050

Monday, 20 August 2018

Local news media carried the disturbing pronouncement by World Bank economists to the effect that Sri Lanka will become an extremely hot territory with 30C temperature rise and $ 12 billion per year economic loss by 2050.


Singapore miracle – How SL could benefit from trade with Singapore

Monday, 20 August 2018

According to a media report released by President’s Media Division, a committee of experts has been appointed by the President to examine and report on ‘the practical impact and use of the proposed officer policy guidelines and recommendations on


Columnists More