Asian markets fluctuate after mixed US jobs report

HONG KONG (AFP): Asian equities swung Monday following a mixed US jobs report that left investors weighing the chances of another Federal Reserve interest rate hike.

Global markets endured a volatile time last week, with traders spooked by a range of issues including a US rating downgrade, rising Treasury yields and a lack of concrete measures to boost Chinese growth.

While inflation continues to come down in the United States and parts of the economy are showing signs of slowing, there is plenty of speculation that the Fed will lift rates at least once more this year.

A much-anticipated jobs report Friday showed fewer-than-forecast new posts were created last month, playing into the view that the central bank could stand pat.

The cheer was offset by a still-strong read on wage growth, which backed up the hawkish outlook for more tightening, with Bloomberg reporting traders see a 40-percent chance of another hike this year.

In the medium term, they still see 1.25 percentage points of cuts by the end of 2024.

The debate was also taking place at the central bank, with Chicago Fed boss Austan Goolsbee saying officials had to be patient and that he was optimistic inflation can be brought down without sparking a recession.

He added that the question should be how long borrowing costs are kept at elevated levels, pointing out “if you hold at 5.25 percent, 5.5 percent, five-and-whatever while inflation goes down, that is a restrictive environment”.

“Holding is increasing restrictiveness in that sense.”

However, Governor Michelle Bowman said policymakers might need to lift again to achieve stability in prices.

Investors will be keeping a close eye on fresh US inflation data this week as well as jobless claims figures, hoping for a better idea about the Fed’s plans.

Wall Street’s three main indexes ended Friday in the red, having suffered a late pullback from the morning’s rally.

And Asian investors struggled to get the week off to a positive start, with many markets fluctuating.

Tokyo was flat, while Hong Kong, Shanghai, Sydney and Wellington slipped. Singapore, Taipei, Manila and Jakarta all rose.