GLOBAL MARKETS-Asian stocks set for best weekly gain in 9 years, U.S. jobs eyed

GLOBAL MARKETS-Asian stocks set for best weekly gain in 9 years, U.S. jobs eyed

Reuters  | Jun 05, 2020 14:30

GLOBAL MARKETS-Asian stocks set for best weekly gain in 9 years, U.S. jobs eyed

(Updates levels throughout)
* Asian stocks at multi-week peaks, valuations heady
* Euro hits 1-1/2 month high helped by ECB stimulus
* U.S. unemployment report in view

By Swati Pandey
SYDNEY, June 5 (Reuters) - Asian stocks extended gains on
Friday and were poised for their biggest weekly rise since 2011
while the euro hit a 1-1/2 month high as Europe's central bank
surprised with more stimulus, fuelling hopes for a global
In a sign the positive mood was likely to spread elsewhere,
E-mini futures for the S&P 500 EScv1 jumped 0.8% to reach a
three-month peak. Eurostoxx futures STXEc1 added 1.2%, futures
for Germany's Dax FDXc1 gained 1.25% while those for London's
FTSE FFIc1 were up 1%.
Investors are pricing in a global economic recovery despite
data showing the severe damage wrought by the coronavirus
lockdowns. Later in the day, U.S. nonfarm payrolls figures are
expected to show further deterioration in the country's jobs
MSCI's broadest index of Asia-Pacific shares outside of
Japan .MIAPJ0000PUS reversed early losses to hit a 12-week top
of 511.73.
The index is up more than 7% so far this week, on track for
its best weekly showing since December 2011.
South Korea's KOSPI .KS11 was among the best performers on
Friday, up 1.5% while Japan's Nikkei .N225 added 0.7%.
Chinese shares .CSI300 turned positive as did Hong Kong's
Hang Seng index .HSI .
Analysts cautioned about the heady levels, with equity
valuations at their highest since the boom in 2000,
according to Matthew Sherwood, investment strategist for
Technical chart indicators suggest the market is at
"over-bought" levels, Sherwood added, a signal that a correction
is due.
World equity markets were thrashed in March when they hit
"bear territory" on fears the COVID-19 driven lockdowns would
push the global economy into a long and deep recession.
Market sentiment has since been bolstered by powerful
central bank stimulus.
"Central banks have rightly stepped in to cushion the
economic blow of COVID-19 and unquestionably succeeded in
steadying the ship," said Bob Michele, chief investment officer
and head of the global fixed income, currency & commodities
group at J.P.Morgan Asset Management.
However, Michele warned the massive scale of quantitative
easing would distort pricing and mute traditional signals from
bond markets on growth and inflation, advocating "co-investing"
alongside central banks.
Investor attention is now focused on Friday's U.S.
employment report, which is expected to show nonfarm payrolls
fell in May by 8 million jobs after a record 20.54 million
plunge in April.
The U.S. unemployment rate is forecast to rocket to 19.8%, a
post-World War Two record, from 14.7% in April. Currency markets show continued confidence in the expected
revival of the global economy.
The euro EUR= hit a 12-week high of $1.1377 led by the
European Central Bank's (ECB) plan to boost its emergency bond
purchases. The common currency is up 2.4% this week, on track for its
third consecutive weekly gain.
All eyes will next be on the U.S. Federal Reserve, which
holds its regular two-day policy meeting next week.
The U.S. dollar was a tad higher against the Japanese yen
JPY= at 109.32, having risen 1.4% so far this week.
The risk sensitive Australian dollar AUD= jumped to a
five-month peak at $0.7004, on track for its third straight
weekly rise.
In commodities, U.S. crude CLc1 gained 16 cents to $37.57
per barrel and Brent LCOc1 added 32 cents to $40.31. O/R
Spot gold XAU= inched down to $1,708.8 an ounce. GOL/

Global assets
Global currencies vs. dollar
Emerging markets
MSCI All Country Wolrd Index Market Cap

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