A man walks past a screen showing a graph showing the average movements of recent Nikkei shares outside a brokerage in Tokyo, Japan, December 30, 2020. REUTERS / Issei Kato / File Photo
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- Asian stock exchanges:
- Nikkei adds 0.3%, future S&P 500 up 0.4%
- The euro is down a seven-year high against the yen ahead of the ECB meeting
- U.S. CPI report to test market thinking about Fed hikes
- Oil companies after Saudi Arabia raises prices
SYDNEY, June 6 (Reuters) – Asian equities joined U.S. equities futures for cautious gains on Monday ahead of US inflation data this week as the euro hit a seven-day high years against the yen amid tightening bets on the European Central Bank.
Oil prices consolidated after Saudi Arabia sharply raised its crude oil sales prices in July, an indicator of scarce supply even after OPEC + agreed to accelerate production increases during the next two months.
MSCI’s Wider Asia-Pacific Non-Japan Equity Index (.MIAPJ0000PUS) rose 0.1%, while Japan’s Nikkei (.N225) recovered its initial losses to gain 0%. 6%.
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S&P 500 futures added 0.5% and Nasdaq futures 0.6%. EUROSTOXX 50 futures rose 0.8% and FTSE futures 1.0%.
Chinese chips (.CSI300) rose 1.3% after a survey confirmed that service sector activity fell in May, but the Caixin index still improved to 41.4 from 36.2 . Read more
The sentiment was helped by comments from U.S. Secretary of Commerce Gina Raimondo that President Joe Biden has asked his team to study the option of raising some tariffs in China. Read more
Markets will be watching the US consumer price report on Friday, especially after EU inflation shocked many with a record high last week.
Forecasts are forecast to rise sharply by 0.7% in May, although the annual rate remains at 8.3%, while core inflation slows slightly to 5.9%.
A high number would only raise expectations of an aggressive tightening by the Federal Reserve, with markets already at half a point in June and July, and nearly 200 basis points at the end of the year.
Some analysts thought Friday’s optimistic payroll report suggested the Fed was on its way to a soft landing.
“May figures were as good as the Fed could have expected,” said Barclays economist Jonathan Millar.
“It’s a good sign that the Fed’s plans to cool the labor market are playing out well so far, with solid gains in employment that continue to generate steady income gains that will help alleviate the worries of recession. moment “.
NOT SO NEGATIVE
The European Central Bank is meeting on Thursday and it is expected that President Christine Lagarde will confirm the end of bond purchases this month and a first-rate increase in July, although the jury is deciding whether it will be 25 or 50 basis points.
Money markets are priced at 125 bp increases at the end of the year and 100 bp as early as October.
“The recent communication from ECB officials predicted increases of 25 bp in July and September to come out of negative rates at the end of the third quarter, although some members prefer to leave the door open for rises of more than 50 bp,” he said. NAB analyst. “The press conference following the Lagarde meeting will be closely watched.”
The outlook for rates to turn positive this year has helped the euro rise to $ 1.0731, a bit far from its recent low of $ 1.0348, although it has struggled to remove resistance around of $ 1.0786.
The euro also hit the yen at 140.39 for a seven-year high after rising 2.9% last week, while the dollar remained at 130.65 yen after also gaining a 2.9% last week.
Faced with a basket of currencies, the dollar stood at 102,110 after consolidating 0.4% last week.
In commodity markets, wheat futures rose 4% after Russia hit the Ukrainian capital, Kyiv, with missiles, lowering hopes of progress in peace talks. Read more
Gold stuck at $ 1,855 an ounce, having maintained a tight range for the past two weeks.
Oil prices rose further after Saudi Arabia set higher prices for shipments to Asia, while investors bet that supply-side increases projected by OPEC will not be enough to meet demand, especially because China is easing its blockades.
“Perhaps only one-third to one-half of what OPEC + has promised will be connected in the next two months,” said Vivek Dhar, a CBA mining and energy analyst.
“Although this increase is very necessary, it does not meet the expectations of growing demand, especially with the EU’s partial ban on Russian oil imports also considered. We see upside risks to our price forecast Brent oil short-term US $ 110 / bbl “.
In fact, Brent has already surpassed much by adding 74 cents on Monday to $ 120.46 a barrel. U.S. crude rose another 75 cents to $ 119.62 a barrel.
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Editing by Sam Holmes and Jacqueline Wong
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