GLOBAL MARKETS-Asian stocks set to follow U.S. jobs rally, China in focus

By Imani Moise
NEW YORK, July 2 (Reuters) - Asian stocks were likely to
track a firmer Wall Street session on Friday after strong U.S.
jobs data although growing Sino-U.S. tensions and a worrying
surge in coronavirus cases is likely to cap gains.
Japan's Nikkei 225 futures JNIc1 rose 0.45% and
Australia's S&P/ASX 200 futures YAPcm1 climbed 0.58%.
E-mini futures for the S&P 500 EScv1 rose 0.14%.
"While June data reflected a big improvement in the U.S.
labor market, the recent sharp acceleration in new virus cases
plus the prospect of an end to unemployment benefits by the end
of July are two big layers of uncertainty," said NAB Markets
analyst Rodrigo Catril, adding that the uptick in U.S. cases
could mean extended headwinds for the labor market.
Wall Street ended Thursday higher following a record
increase in payrolls and a decline in unemployment. U.S. markets
are closed on Friday in observance of Independence
Day. However, investor focus is shifting to worsening strains
between China and the United States.
More than 75 U.S. members of congress sent a letter to the
President Donald Trump urging him to take make a formal
determination on whether China's treatment of Muslim Uighurs and
other groups constitutes an atrocity. The U.S. State Department also warned American companies
including Amazon.com Inc AMZN.O , Walmart Inc WMT.N and Apple
Inc AAPL.O to check their supply chains and ensure they are
not doing business with entities linked to alleged human rights
abuses against Uighurs in China's Xinjiang province. Separately, Congress passed legislation seeking to punish
banks that do business with Chinese officials who implement
Beijing's draconian new national security law on Hong Kong.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.92%. The Dow Jones Industrial Average .DJI rose
0.36%, the S&P 500 .SPX gained 0.45% and the Nasdaq Composite
.IXIC added 0.52%.
The positive economic data also pushed oil prices higher.
Brent crude .LCOc1 futures settled at $43.14 a barrel,
rising $1.11, or 2.6%. U.S. West Texas Intermediate (WTI) crude
.CLc1 futures settled at $40.65 a barrel, up 83 cents, or
2.1%.
Investors still embraced the safe-haven dollar and gold,
which usually rise when risk appetite declines, as an
acceleration in new COVID-19 cases across the country prompted
fresh restrictions. The dollar index =USD rose 0.058%, with the euro EUR= up
0.01% to $1.1239.
The Japanese yen weakened 0.02% versus the greenback at
107.53 per dollar, while sterling GBP= last traded at $1.2468,
up 0.02% on the day.
Spot gold XAU= rose 0.4% to $1,777.04 per ounce
U.S. Treasury yields ended the day lower ahead of the July 4
long weekend, with the benchmark 10-year US10YT=RR yield fell
1.1 basis points at 0.6709%.

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