Monday, 9 October 2017

Asian stocks higher despite rising geopolitical concerns

Posted by Valentine at 11:52 Labels:

Asian stocks ended mostly higher on Monday despite key markets remaining closed for holidays. China returned after a week-long holiday, increasing volatility in the region.

Australia ASX +27.70 +0.48% 5,805.10 CLOSED
Shanghai Comp +25.43 +0.76% 3,374.38 CLOSED
Hang Seng Index -131.30 -0.46% 28,326.74 OPEN
Nikkei 225 +62.15 +0.30% 20,690.71 CLOSED
TSEC 50 Index +14.54 +0.14% 10,532.81 CLOSED

Earlier today, the Caixin services purchasing managers' index exposed the weakest non-manufacturing activity in China in nearly two years in September.

The Caixin/Markit PMI came in at 50.6 last month, against a 52.7 reading registered in the previous month. The Caixin composite PMI was at 51.4 in Sept, down from August’s 52.4.

Last week, the US Labor Department said the economy reduced 33,000 jobs in September. While data came in below expectations and put an end to seven consecutive years of labor market growth, players understood data was influenced by the effects of Hurricanes Irma and Harvey.

The unemployment rate dropped to its lowest point in almost 16 years at 4.2 percent and average hourly earnings increased 2.9 percent year over year.

On Friday, the Dow Jones industrial average ended 0.01 percent lower at 22,773.67. The tech-heavy Nasdaq Composite index secured a 0.07 percent gain at 6,590.18.

Reports showed last week that North Korea is preparing a new long-range missile test for the upcoming days. The US dollar fell in the light of such news from the Korean peninsula.

A few FOMC officials spoke on Friday regarding the future of interest rates. Dallas Fed President Robert Kaplan said he was "open minded" about the possibility of a third rate hike.

New York Fed President William Dudley followed that line saying it was "appropriate" for the regulator to move forward its monetary policy normalization process.

According to Fed funds tracked by CME Group’s FedWatch program, investors are pricing in a 91.7 percent chance of a 25 basis points interest rate hike by December.

Ahead this week, attention will be directed to the release of Fed minutes on Wednesday and fresh inflation figures on Friday. Both reports are expected to have effects on expectations for further monetary policy changes, especially on the future of interest rates.

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