Asian shares rise amid hopes for low interest rates as oil jumps after cyber hit

Tokyo — Stocks rose on Monday amid speculation that interest rates will remain low due to receding inflationary pressure, while oil and gas prices jumped after a cyber attack on a US pipeline operator unnerved markets.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.35%, while US stock futures rose 0.24%.

Australian stocks hit their highest in more than a year, boosted by gains in miners, and shares in China rose 0.46%. Japanese shares gained 0.91%.

US nonfarm payrolls data on Friday showed jobs growth unexpectedly slowed in April, which gave equities a lift but put downward pressure on the dollar and US Treasury yields.

Oil and petrol futures extended gains after a cyber attack shut down a US pipeline operator that provides nearly half of the US east coast’s fuel supply.

“It [softer payrolls] certainly pushes back the timetable for Fed tapering, perhaps to December from the prior expectations of the Jackson Hole Symposium in late August,” Chris Weston, head of research at broker Pepperstone in Melbourne, wrote in a memo.

“A softer payrolls is good for the reflation trade; the dollar weakened across the FX spectrum. We’ve also seen a solid bid in equity indices, and futures are up.”

On Friday the Dow Jones industrial average and the S&P 500 rose to record closing highs after disappointing data on the US jobs market eased concerns about a spike in consumer prices.

In recent weeks, some investors had been placing bets that a robust US economic recovery from the coronavirus pandemic would force the Federal Reserve to raise interest rates earlier than the central bank has outlined.

However, the weak nonfarm payrolls report caused a rapid reversal in some of these trades, which rippled through stocks, bonds, and major currencies.

The focus now shifts to US consumer price data due on Wednesday that will help investors determine whether they need to scale back their inflation expectations even further.

MSCI’s broadest index of global stock markets hit a record high on expectations that low rates will continue to spur lending and economic growth.

The dollar index edged up against a basket of six major currencies to 90.252 but was still near its weakest since February 25.

The British pound jumped to the highest in more than two months against the greenback, but worries about Scottish independence could curb sterling’s gains, traders said.

China’s onshore spot yuan strengthened past 6.43 per dollar for first time since February 10.

The yield on benchmark 10-year Treasury notes steadied at 1.5983% in Asia on Monday having plunged to a two-month low of 1.4690% on Friday.

US crude ticked up 1.17% to $65.66 a barrel. Brent crude rose to 1.11% to $69.04 per barrel in Asian trading as the disruption to US supplies rattled energy markets.

Petrol futures on the New York Mercantile Exchange rose 2.07% to $2.1710 a gallon, near a three-year high.

The White House is working closely with top US fuel pipeline operator Colonial Pipeline on Sunday to help it recover from a ransomware attack that forced the company to shut its main fuel lines.

Reuters