Strong US jobs reports boosts Asian markets, dollars

Asian markets experienced gains on Monday following a robust US jobs report that alleviated concerns regarding the world’s largest economy. Concurrently, the dollar maintained its strength as traders reduced expectations for another significant interest rate cut.

Oil prices saw a slight decline as investors awaited Israel’s reaction to the recent missile attacks from Iran, raising fears of a potential regional conflict in the Middle East.

On Friday, all three major indices on Wall Street surged after data revealed that the US economy added an impressive 254,000 jobs last month, coupled with a decrease in the unemployment rate. This report marked the strongest job growth in six months and significantly outperformed the figures from July and August, which had raised alarms about a possible recession.

The dollar strengthened in response to this positive news, leading investors to temper their predictions about the Federal Reserve implementing a 50 basis point interest rate cut in its upcoming meeting. “The September payroll numbers were significantly better than anticipated,” commented Taylor Nugent, a senior markets economist at National Australia Bank. “It would have required more negative news for the board to align with the extent of cuts anticipated in the near term. Instead, this data supports the view that the US labor market is not poised for a sharp downturn and may be performing better than previously thought.”

Traders are also keenly awaiting inflation data later this week, which could provide further insight into the Fed’s decision-making process. Jim Reid from Deutsche Bank Research expressed his view that the rate cuts priced in since mid-summer were only likely if a recession occurred. “If that doesn’t happen, then the rates market has been overly pessimistic,” he asserted.

The stronger dollar against the yen contributed to a rise in Japanese stocks, with the Nikkei 225 index climbing nearly two percent. Meanwhile, the Hang Seng Index in Hong Kong continued its upward trend, driven by recent economic stimulus measures from China. Gains were also seen in markets across Sydney, Seoul, Singapore, Taipei, Jakarta, Bangkok, and Manila, although Wellington and Mumbai recorded slight declines. In Europe, London, Paris, and Frankfurt all opened higher.

Crude oil prices dipped after a tumultuous trading day on Friday, where they had surged by five percent before retracting some gains. The initial increase was fueled by US President Joe Biden’s comments regarding potential Israeli strikes on Iranian oil facilities in retaliation for the missile attacks. However, prices dropped later when Biden advised against such actions, emphasizing his intention to prevent an escalation into full-scale war in the region.

As the crisis unfolds, investors remain alert, especially as it marks the first anniversary of Hamas’s attack on Israel, which has since led to ongoing conflicts involving Iran-aligned groups in Gaza and Lebanon.

### Key Figures Around 0710 GMT:

– **Tokyo** – Nikkei 225: UP 1.8% at 39,332.74 (close)

– **Hong Kong** – Hang Seng Index: UP 1.3% at 23,040.03

– **London** – FTSE 100: UP 0.3% at 8,307.89

– **Shanghai** – Composite: Closed for a holiday

– **Dollar/Yen**: DOWN at 148.53 from 148.64 yen on Friday

– **Pound/Dollar**: DOWN at $1.3115 from $1.3124

– **Euro/Dollar**: DOWN at $1.0971 from $1.0976

– **Euro/Pound**: UP at 83.64 pence from 83.62 pence

– **West Texas Intermediate**: DOWN 0.3% at $74.15 per barrel

– **Brent North Sea Crude**: DOWN 0.4% at $77.72 per barrel

– **New York** – Dow: UP 0.8% at 42,352.75 points (close)