SINGAPORE, May 4 2018 : Asian shares were steady while the Japanese yen held onto overnight gains in early trading today as financial markets turned their attention to the looming U.S. payrolls data for fresh catalysts.
Investors were cautious after a largely weak performance on Wall Street overnight as some disappointing earnings reports offset strong economic data, while bond yields slid after a surprising slowdown in euro zone inflation.
The U.S. dollar weakened during what was a choppy session a day after the Federal Reserve ended a policy meeting with no change in rates and a less hawkish statement than investors had anticipated.
The U.S. dollar had erased all its 2018 losses in the past two weeks on expectations the Fed will continue to raise rates, even as other major central banks around the world, including the European Central Bank, take longer to reduce stimulus.
The focus for markets will be on the U.S. jobs data due later in the global day, with the April report likely to underscore labor market strength. Nonfarm payrolls probably increased by 192,000 jobs last month, according to a Reuters survey of economists, after rising only 103,000 in March.
Investors were also keeping a close watch on U.S.-China trade talks, though analysts said they had little confidence that the U.S. delegation in Beijing, led by Treasury Secretary Steven Mnuchin, will achieve any breakthrough on the tariff standoff between the world’s two biggest economies.
The yield on benchmark 10-year Treasury notes rose to 2.9477 percent compared with its U.S. close of 2.946 percent yesterday. The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 2.4802 percent.
Australian shares were up a touch ahead of a Reserve Bank of Australia statement on monetary policy, while Japan’s Nikkei stock index .N225 slid 0.16 percent.
Overnight, Argentina’s peso ARS=RASL, which has been among the worst hit emerging market currencies during the past couple of months on rising U.S. yields, tumbled again to a record low. The currency has been hit by a lack of investor confidence in Latin America’s No. 3 economy, which has been blighted by one of the world’s highest inflation rates.
Argentina’s central bank raised its benchmark interest rate by 300 basis points to 33.25 percent yesterday, but the second steep rate increase in less than a week failed to stop the country’s peso currency from plunging.
Elsewhere, U.S. crude ticked up 0.04 percent at $68.46 a barrel. Gold was slightly higher, with spot gold fetching $1313.34 per ounce. – Reuters