SYDNEY- Asia stocks hit 27-month highs on Thursday as softer US data narrowed the odds on a September rate cut there, boosting bonds and commodities while dragging on the dollar.
A holiday in the United States made for thin trading, as investors waited to see just how large a majority the Labor Party might get in the UK election.
Markets are well prepared for a change given opinion polls have for months put the center-left party on course for a landslide victory over the Conservatives.
“The Labor party has relatively modest tax and spending plans, with the overall goal of shrinking the UK’s large budget deficit,” CBA analysts said.
“The Labor government’s policies will also move the UK back towards closer alignment to the EU.”
Across the English Channel, polls suggested the National Rally (RN) would not win a majority of seats in Sunday’s French election as mainstream parties moved to block the far right.
FTSE futures nudged up 0.1 percent , while sterling held at $1.2740 EUROSTOXX 50 futures were little changed.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9 percent to reach its highest since April 2022.
Japan’s Nikkei climbed 0.9 percent to within spitting distance of its March peak, while the broader Topix clinched all-time highs.
Taiwan’s main index also struck a record led by the tech sector and Taiwan Semiconductor Manufacturing Co (TSMC) which cleared T$1,000 for the first time.
S&P 500 futures and Nasdaq futures were steady after reaching another record overnight in the wake of soft economic data.
The US ISM measure of services activity surprised by sliding to its lowest since mid-2020, with employment notably weak ahead of the June payrolls report due on Friday.
Analysts cautioned the series was contradicted by strength in the PMI survey of services, but did note that price measures in both surveys pointed to easing inflation.
A run of subdued data mean Citi’s US economic surprise index has sunk to -47.5, the lowest since August 2022. Meanwhile, the closely watched Atlanta Fed’s GDPNow estimate fell to just 1.5 percent from 1.7 percent.
