The major Asia-Pacific stock indexes finished higher on Monday on the back of Friday’s surprisingly robust U.S. jobs. The unexpected recovery in U.S. employment lifted hopes of a quicker global economic revival after many weeks of lockdowns aimed at controlling the coronavirus pandemic.
Although some analysts cast doubts over the validity of the U.S. employment numbers, the concerns were not strong enough to derail the risk driven stock market rally. Some analysts looked to the bright side, however.
“As we get more and more data that perhaps confirms that the economy is really on the mend and the second wave of infections may not be very severe, then that will boost confidence even further,” said Vasu Menon, senior investment strategist at OCBC Bank Wealth Management.
On Monday, Japan’s Nikkei 225 Index settled at 23178.10, up 314.37 or +1.37%. Hong Kong’s Hang Seng Index finished at 24783.95, up 13.54 or +0.05% and South Korea’s KOSPI Index closed at 2184.29, up 2.42 or +0.11%.
In China, the Shanghai Index settled at 2937.77, up 6.97% or +0.24% and Australia’s S&P/ASX 200 Index closed at 5998.70, up 6.90 or +0.12%.
US Jobs Report Underpins Markets
Monday’s wave of optimism was triggered by U.S. Non-Farm Payrolls, which unexpectedly rose by 2.509 million jobs last month – versus consensus estimates of a fall of 8 million jobs after a record plunge of 20.687 million in April.
The Labor Department’s closely watched employment report also showed a surprise fall in the jobless rate to 13.3% last month from 14.7% in April, a post-World War II high.
Fresh Chinese Data Reveals Coronavirus Impact on Economy
Chinese trade data published on Sunday also revealed the impact from the coronavirus crisis.
Exports contracted in May as global lockdowns continued to sink demand, while a sharper-than-expected fall in imports pointed to mounting pressure on manufacturers as world growth stalls, according to Reuters. Still, the country posted a record trade surplus last month as imports dropped.
Revised Japanese GDP Data Shows Smaller Contraction
In Japan, revised gross domestic product data for the first quarter showed the economy contracted less than initially thought, though the outlook suggested the nation was facing its worst postwar slump due to the pandemic, Reuters reported.
Japanese markets hardly budged after the revised data as traders have already priced in a steep economic downturn in the current quarter. Economists are forecasting an annualized GDP contraction of more than 20% in the current quarter.
Despite the revised data, most analysts maintained their pessimistic outlook for the economy.
“The upward revision to Q1 GDP displayed in the revised estimate is cold comfort given that output is plummeting this quarter. We expect GDP to fall by another 9% this quarter,“ said Tom Learmouth, an economist at Capital Economics.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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