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Asian stock futures rise with bonds after BOE cut; oil above US$41

by August 5, 2016 General

A man using mobile phone walks past at an electronic board showing Japan's Nikkei share average outside a brokerage in Tokyo July 6, 2016. — Reuters picA man using mobile phone walks past at an electronic board showing Japan’s Nikkei share average outside a brokerage in Tokyo July 6, 2016. — Reuters picHONG KONG, Aug 5 — Asian index futures rose with Australian and New Zealand government debt, after the Bank of England’s policy easing soothed concern over the impact of the Brexit vote. Oil held above US$41 (RM165) a barrel, while the dollar meandered ahead of US jobs data.

Stock-index futures from Japan to Australia and Hong Kong signalled gains after a surge in British equities, while the S&P 500 Index ended Yesterday little changed as traders moved to the sidelines ahead of the payrolls report. Yields on 10-year Australian and Kiwi debt sank at least three basis points, joining a rally in bonds globally. The pound held near a one-week low following the Bank of England’s first interest-rate cut in more than seven years, while the yen was little changed for a second day against the dollar. US crude was headed for its first weekly advance in three weeks amid easing concern over a glut.

The BOE cut growth forecasts for the UK by the most ever as policy makers unveiled a stimulus package aimed at containing the fallout from the British decision to leave the European Union. While the pound retreated and bonds jumped, other assets showed little reaction to the widely expected move, with investors switching their focus to Today’s update on nonfarm payrolls in the US Economists predict the report will show continued improvement in the labor market, a key factor for the Federal Reserve, which is mulling whether to stick to its plan to continue tightening monetary policy in 2016.

The US “employment number is the catalyst for the market — that’s what is going to rule the pricing trends over the next few weeks,” said Jim Davis, regional investment manager at the Private Client Reserve of US Bank, which oversees US$128 billion.

Payrolls probably rose by 180,000 workers in July, following a 287,000-person increase in June, according to the median of economists’ estimates compiled by Bloomberg. The jobless rate is projected to fall to 4.8 per cent, from 4.9 per cent in the previous month.

Before the US data, Taiwan and the Philippines are due to update on consumer prices, Malaysia reports on trade and a reading on Indonesian gross domestic product is scheduled. The Reserve Bank of Australia also releases a monetary policy statement after cutting interest rates to a fresh record low this week.


New Zealand’s S&P/NZX 50 Index, the first major stock gauge to start trading each day, fell by 0.1 per cent as of 8am Tokyo time, after rising 0.3 per cent last session. The measure is due to snap a five-week run of gains, falling 0.8 per cent so far this week. Futures on the S&P 500 were little changed at 2,160, after the underlying benchmark added less than one point yesterday.

Nikkei 225 Stock Average futures were bid for 16,220 on the Osaka pre-market, up 0.2 per cent from where they closed last session, while yen-denominated contracts on the Japanese index were little changed in Chicago, trading at 16,215 following a 1 per cent jump in the previous session. Singapore-traded Nikkei 225 futures were also up 0.2 per cent.

In Australia, futures on the S&P/ASX 200 Index climbed 0.3 per cent in most recent trading, as those on the Kospi index in Seoul advanced 0.1 per cent. Hang Seng and Hang Seng China Enterprises index futures in Hong Kong rose at least 0.4 per cent, as contracts on the FTSE China A50 Index increased 0.2 per cent. — Bloomberg