Shares rise

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SYDNEY- Asian shares turned mixed on Monday while gold spiked to all-time peaks above $2,100 at the start of a busy week for economic data that will test market wagers for early and aggressive rate cuts from major central banks next year.

In particular, the US November payrolls report on Friday needs to be solid enough to support the economic soft-landing scenario, but not so strong as to threaten the chance of easing. Median forecasts are for payrolls to rise 180,000, keeping unemployment steady at 3.9 percent .

Many analysts suspect risks are to the upside, with Goldman Sachs tipping 238,000 including a chunk of workers returning from strikes, and a jobless rate of 3.8 percent .

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There was also still a risk the Israel-Hamas war could widen into a broader conflict with three commercial vessels coming under attack in the southern Red Sea.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3 percent , led by gains in South Korea and Australia. Japan’s Nikkei dipped 0.6 percent as the yen extended recent gains.

Chinese blue chips eased 0.5 percent , while the country’s central bank set another firm fix for the yuan.

Trade figures for China are due later in the week with the recent trend being softening exports to the US overshadowing gains in Asia.

EUROSTOXX 50 futures and FTSE futures were little changed. S&P 500 futures dipped 0.2 percent , after finishing at a 20-month high on Friday, while Nasdaq futures lost 0.3 percent . The S&P 500 is up 19 percent for the year so far and just 4 percent away from its all-time peak.

The latest surge was stoked by wagers the next move by the Federal Reserve will be to cut rates, with Fed Chair Jerome Powell on Friday declining the opportunity to push back hard against aggressive market pricing.

Futures now imply a 60 percent chance the Fed will ease as soon as March, up from 21 percent a week ago, and are pricing in around 135 basis points (bps) of cuts for all of 2024.

The turnaround in Treasuries has been nothing short of astonishing as two-year yields fell 41 bps in just a week, the best performance since the mini-crisis in US banks back in March.

So it was no surprise that some profit-taking emerged on Monday and nudged yields on 10-year notes up to 4.25 percent , but still well short of the October top of 5.02 percent. – Reuters

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