- MSCI Asia ex-Japan index -0.4%; global markets lagging in the first half of the year
- Dollar hits 15-month high against the yen, 4-month high against the euro
- All eyes on Friday’s payroll data
SINGAPORE, July 1 (Reuters) – Shares began a winding start to the second half of 2021 on Thursday, dipping in Asia amid concerns over new coronavirus infections and further lockdowns, while bond markets were on the rise and that the dollar climbed ahead of the US workforce Data.
Equity futures showed a slight rebound in Europe, after a massive sell-off at the end of the month, Euro Stoxx 50 futures were up 0.4%, while FTSE futures were up 0, 1% and S&P 500 futures hit all-time highs and rose about 0.15%.
In an Asian session thinned by a Hong Kong holiday, the Japanese Nikkei (.N225) fell 0.3% and the MSCI Asia-Pacific equity index was the largest outside of Japan (.MIAPJ0000PUS) fell 0.4%.
The US dollar hit a four-month high of $ 1.1839 per euro and a 15-month high of 111.18 yen.
“The virus is still playing a role… although it’s hard to see a direction in anything right now,” ING economist Rob Carnell said on the phone from Singapore.
“There is a broad feeling the dollar is not such a bad unit to hold,” he said, as traders looked to US employment data on Friday for the next. index to the Federal Reserve’s rate outlook.
“Everyone is a little nervous.”
In China, stocks hailed the Communist Party’s centenary with a slight uptick, but a nationalist speech by President Xi Jinping in Tiananmen Square did little to ease geopolitical nerves and the yuan weakened very slightly.
Data in Asia also painted a mixed picture, with Japanese manufacturers’ moods at their highest for two and a half years, but factory activity is slowing in the region – particularly in Vietnam and Malaysia – due to ‘a resurgent pandemic. Read more
German retail sales missed expectations.
Slowing vaccination rates in Asia and extending restrictions to curb the spread of the virus – along with a regulatory crackdown on Chinese tech giants – have lagged regional markets this year.
The MSCI Ex-Japan Index closed the first half with a 5.8% gain versus the rise in global equities (.MIWD00000PUS) of 11.4% and a gain of 14.4% for the S&P 500, which set its fifth consecutive closing record late last month.
EYES ON THE PAYROLL
Market participants will focus on eurozone unemployment, a Swedish central bank meeting, and appearances by Bank of England Governor Andrew Bailey and European Central Bank President Christine Lagarde later in the day to exchange clues.
However, it was Friday’s U.S. wages that traders believed could shake markets from a slumber that has locked currencies in some of their tightest trading ranges in decades.
Overnight dollar / yen implied volatility is at its highest for more than three months.
US private wages surpassed expectations overnight, although they were not a reliable guide to the broader Friday indicators.
Economists polled by Reuters expect a gain of 700,000 jobs for June, against 559,000 in May. But the variation between the 63 estimates is significant, ranging from 376,000 to over a million.
“Unless the monthly jobs report is disappointing, the dollar index to beat is the highest of the year at 93.4,” analysts at Singapore’s DBS Bank said in a statement. note.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, hit 92.483 in the Asian session, its highest since April. The yield on benchmark ten-year US Treasuries remained stable in Asia at 1.4696%.
In commodities markets, metal prices appear to be stabilizing below May’s peaks and oil is approaching multi-year highs reached earlier in the week.
Brent crude futures rose 0.1% for the last time to $ 74.69 a barrel. Corn futures continued a sharp rebound overnight as weaker than expected US plantings supported prices.
Reporting by Tom Westbrook; Editing by Himani Sarkar
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