Asian shares followed their US peers higher Friday ahead of a key jobs report as traders weighed the outlook for inflation and growth.

Stocks rose in Japan, Korea and Australia while European futures pointed higher. US contracts fluctuated after Thursday’s 1.8% rise in the S&P 500 and a 2.8% jump in the tech-heavy Nasdaq 100.

Markets are shut in Hong Kong and China, where officials have vowed to carry out a slew of government policies to stimulate the economy. The offshore yuan rose amid thin trading in Asia.

A Bloomberg gauge of the dollar steadied after overnight losses, while the yen held near the psychologically important 130 level against the greenback. Benchmark Treasury yields held at 2.91%.

Investors remain on edge as some fear the pace of US monetary tightening could throw the world’s largest economy into a recession. Friday’s May labor report is likely to show the smallest gain in jobs since April 2021 alongside a down shift in average hourly earnings growth, Bloomberg Economics said.

“We really do just need a lot more data, not one data point, not just the jobs data,” Carol Schleif, BMO Family Office LLC deputy chief investment officer, said on Bloomberg TV. “The potential range of outcomes is wider than it has been. We do think that you are going to see a lot of volatility through the summer.”

Federal Reserve Vice Chair Lael Brainard said it was hard to see a case for a September pause in rate hikes and that increases of 50 basis points in June and July seemed reasonable.

“We believe a slight lean toward defensive sectors and away from the growth-oriented areas of this market still make sense,” said Scott Brown, technical market strategist at LPL Financial. “Outside of this recent rally, very little about this market has changed from a technical standpoint and that makes us wary of calling the all-clear.”

Meanwhile, OPEC+ agreed to increase the size of its oil-supply hikes by about 50% in July and August, bending to pressure by major consumers including the US to fill the gap created by sanctions on Russian supplies. Oil futures pared overnight gains.

Source:
courtesy of BLOOMBERG

by Brett Miller

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