SINGAPORE, 5th June, 2024 (WAM) -- Asian stocks broadly rose on Wednesday, while the dollar was steady as a softening U.S. labour market firmed up bets of a Federal Reserve interest rate cut in September and investors awaited crucial payrolls report later this week, Reuters reported.
Worries about a cooling U.S. economy, however, kept a lid on risk appetite, while the focus in Asia remained on Indian markets, with stocks volatile on Wednesday after the plunge in the previous session as voting results showed a slimmer-than-expected victory margin for Prime Minister Narendra Modi.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.76 percent, although the Nikkei fell 1 percent as the renewed strength in Japanese yen weighed.
The buoyant mood is set to continue in Europe, with Eurostoxx 50 futures, German DAX futures and FTSE futures all up 0.5 percent ahead of PMI data from much of the region.
Data overnight showed U.S. job openings fell more than expected in April to the lowest level in more than three years, a sign that labour market conditions are softening.
The data emboldened bets of rate cuts this year, with markets pricing in 45 basis points of easing. Traders are also pricing in a 65 percent chance of a rate cut in September, compared with 46 percent a week earlier, CME FedWatch tool showed.
The market focus will now be on the U.S payrolls report due on Friday.
Benchmark 10-year note yields were at 4.3435 percent on Wednesday, after hitting an almost three-week low of 4.314 on Tuesday following the jobs data.
The dollar index, which measures the U.S. currency against six rivals, was steady at 104.21 but close to the near two-month low of 103.99 it hit on Tuesday.
The dollar's relentless strength in the recent past will make way for minor weakness over the next 12 months, according to FX strategists in a Reuters poll, who generally agreed the dollar was overvalued.
Dollar weakness helped the yen strengthen to a more than two-week high of 154.55 per dollar on Tuesday. On Wednesday, it weakened to 155.57.
In India, the Nifty 50 index struggled for direction in volatile trading after sliding nearly 6 percent on Tuesday, its worst session in four years, with foreign investors selling roughly US$1.5 billion worth of shares.
Modi's ruling Bharatiya Janata Party lost an outright majority in parliament for the first time in a decade and is dependent on its regional allies to get past the half-way mark required to run the world's largest democracy.
That has stoked some uncertainty over economic policies, including a push for investment-led growth, which has been the cornerstone of the Modi government's rule.
In commodities, oil prices flirted with four-month lows as traders weighed an OPEC+ decision to boost supply later this year and following an increase in U.S. crude and fuel stocks.
Brent crude futures were last at 77.49 per barrel, while U.S. West Texas Intermediate crude futures eased a bit to US$73.19 a barrel.