Asian Stock Market: Covid woes probe bulls ahead of US NFP

Asian equities track Wall Street’s mild gains but virus concerns roil the mood.
China, Australia and New Zealand flashes upbeat signals but can’t bean pre-NFP caution.
Vaccine hopes, receding expectations of tapering join upbeat early signals of US jobs report to back the bulls.
Japan is up for extending and expanding emergency, India marks fresh record infections.

Anil Panchal FXStreet

Asian shares edge higher amid hopes of upbeat US jobs report, as well as faster vaccinations, during early Friday. However, cautious sentiment tames the bullish performance as the coronavirus (COVID-19) worries escalate in Japan and India. That said, MSCI’s index of Asia-Pacific shares outside Japan rises 0.65% whereas Japan’s Nikkei 225 prints 0.12% intraday gain by the press time of the pre-European session.

Following the US and the European Union’s (EU) support to waive off the covid vaccine patents, hopes of faster jabbing swirl, which in turn boosts the market’s mood. Following that the US Federal Reserve (Fed) policymakers rejected the rate hike chatters while early signals for today’s American jobs report for April also came in upbeat.

Amid these plays, all three key benchmarks of Wall Street closed in the positive territory for the first time this week and the risk-on mood helped Asia-Pacific markets as well. On the positive side for Asia could be an upbeat RBA Monetary Policy Statement, strong China trade and PMI, as well as firmer RBNZ Inflation expectations.

Meanwhile, Indian refreshes the all-time high of covid infections with 414,188 the latest figures whereas Japan looks set to extend and expand the third national emergency towards May 30. Also on the risk-negative side could be Aussie-China tussles.

Stocks in China remains mildly bid and those from Australia, Hong Kong and South Korea follow the suit. However, India’s BSE Sensex jumps over 0.60% amid hopes of a 1.0 trillion rupees pandemic pool whereas New Zealand’s NZX 50 drops 0.66% as firm inflation signals a sooner recall of the RBNZ’s easy money policies.

It should be noted that the stock futures track Wall Street to the north but the US 10-year Treasury yield and US dollar index (DXY) seesaw as traders turn cautious ahead of the key US event, namely monthly employment report.

Read: US April Nonfarm Payrolls Preview: Leading indicators point to another strong NFP

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

GBP/USD surges to multi-day peaks past 1.3250

GBP/USD leaves behind Friday’s small pullback and advances past 1.3250 level, or five-day highs, on Monday. Cable’s upside follows extra losses in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD picks up extra pace north of 1.1400

EUR/USD extends its recovery past 1.1400 the figure as the NA session draws to a close on Monday. Indeed, the pair advances for the third straight day amid the persistent offered bias in the US Dollar. Meanwhile, market participants keep gearing up for the ECB Forum in Sintra and the release of critical US labour market data.

Gold struggles to attract investors

Gold remains under marked selling pressure, holding on just above the key $4,000 mark per troy ounce at the beginning of the week. The precious metal reverses two daily advances in a row as renewed effervescence in the Middle East revive inflation concerns and bolster Fed rate hike expectations.

Strategy unveils plan allowing Bitcoin sales to fund stock buybacks, dividends and reserves

Strategy (MSTR) has unveiled a Digital Credit Framework to strengthen the company’s financial standing. Under the new framework, the world’s largest corporate holder of Bitcoin (BTC) will pivot from its previous accumulation strategy, opting to sell BTC in order to boost liquidity, fund dividend payments, execute stock buybacks, and strengthen cash reserves.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.