Strong U.S. Jobs Data Raises Odds of Fed Rate Rise

Strong U.S. jobs data raises odds of Fed rate rise, hits Asian stocks:

Asian stocks buckled while the dollar held firm on Monday after strong U.S. jobs data fanned expectations that the U.S. Federal Reserve may raise interest rates sooner than previously thought.

Stock markets across Asia, including Japan’s Nikkei, Australia, Malaysia and Indonesia fell broadly, with MSCI’s broadest index of Asia-Pacific shares outside Japan dropping 1.2 percent.

While the futures markets were quick to price in improved odds of the Federal Reserve raising rates in June or September, analysts pointed to historically low inflation in the United States and slowing growth as reasons to be worried.

On Wall Street, the S&P500 Index fell 1.4 percent to a three-week low on Friday. S&P futures were slightly weaker on Monday. U.S. debt yields jumped, with the yield on 10-year notes surging to a 10-week high of 2.259 percent. On Monday, the yield last stood at 2.249 percent.

Money market futures prices were almost fully pricing in a first Fed rate hike by the summer. In Asia, the Australian and New Zealand dollars hovered near one-month lows.

The euro fell as low as $1.0822 in early Monday trade and last stood at $1.0840.

The dollar fetched 120.88 yen, having hit a three-month high of 121.29 yen.

Gold also fell to three-month low of $1,164.10 per ounce on Friday. Early on Monday it traded at $1,169.90.


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