| 18 May 2024, Saturday |

Asian shares jump on hopes for low rates, oil up on cyber attack

Stocks soared on Monday, with oil and gas prices surging after a cyber assault on a US pipeline company unnerved markets.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.35 percent, while stock futures in the United States rose 0.24 percent.

Australian stocks hit their highest in more than a year, boosted by gains in miners, and shares in China rose 0.46%. Japanese shares gained 0.91%.

U.S. nonfarm payrolls data on Friday showed jobs growth unexpectedly slowed in April, which gave equities a lift but put downward pressure on the dollar and U.S. Treasury yields.

Oil and gasoline futures extended gains after a cyber attack shut down a U.S. pipeline operator that provides nearly half of the U.S. east coast’s fuel supply.

n a memo, Chris Weston, Head of Research at Melbourne Broker Pepperstone, wrote, “It definitely pushes back the timetable for Fed tapering, perhaps to December from the prior predictions of the Jackson Hole Symposium in late August.”

“A softer payrolls is good for the reflation trade; the dollar weakened across the FX spectrum. We’ve also seen a solid bid in equity indices and futures are up.”

On Friday the Dow Jones Industrial Average and the S&P 500 rose to record closing highs after disappointing data on the U.S. jobs market eased concerns about a spike in consumer prices.

Some investors have been betting in recent weeks that a strong economic rebound in the United States as a result of the coronavirus pandemic would cause the Federal Reserve to increase interest rates sooner than anticipated.

However, the weak nonfarm payrolls report caused a rapid reversal in some of these trades, which rippled through stocks, bonds, and major currencies.

The focus now shifts to U.S. consumer price data due on Wednesday, which will help investors determine whether they need to scale back their inflation expectations even further.

MSCI’s broadest index of global stock markets hit a record high on expectations that low rates will continue to spur lending and economic growth.

The dollar index rose to 90.252 against a basket of six major currencies, but it was still near its lowest level since February 25.

The British pound rose to its highest level against the US dollar in more than two months, but traders warned that concerns about Scottish independence might limit sterling’s gains.

For the first time since February 10, China’s onshore spot yuan surpassed 6.43 per dollar.

The yield on benchmark 10-year Treasury notes steadied at 1.5983% in Asia on Monday after having plunged to a two-month low of 1.4690% on Friday.

U.S. crude ticked up 1.17% to $65.66 a barrel. Brent crude rose to 1.11% to $69.04 per barrel in Asian trading as the disruption to U.S. supplies rattled energy markets.

On the New York Mercantile Exchange, gasoline futures gained 2.07% to $2.1710 per gallon, near a three-year high.

On Sunday, the White House partnered with Colonial Pipeline, a leading US fuel pipeline provider, to assist in its recovery from a ransomware assault that forced the company to shut down its main fuel lines.

  • Reuters