SYDNEY- Asian shares were trying to extend their recent rally to a third week on Monday in the hope US jobs figures show the expected revival in hiring in May and keep the global recovery on track.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3 percent, having rallied 2.2 percent last week. Japan’s Nikkei fell 0.7 percent, while Australia touched a fresh all-time peak.
Chinese blue chips slipped 0.4 percent, while a survey showed a slight slowdown in factory activity but a pick-up in the giant service sector.
“It feels like a market looking for direction in the face of uncertainty around the interplay between much-feared inflation and much hoped-for growth recovery,” says Patrik Schowitz, global multi-asset strategist at J.P. Morgan Asset Management.
“In this environment, while we continue to reduce risk exposure, we stay long given just how strong growth is likely to stay, as well as the remaining upside to economic and earnings growth expectations.”
Markets in the United States and Britain are closed for a holiday, but futures were still trading in Asia with the Nasdaq up 0.2 percent and S&P 500 ahead by 0.1 percent. EUROSTOXX 50 futures eased 0.1 percent.
The main event of the week will be US payrolls on Friday with median forecasts at 650,000 but the outcome is uncertain following April’s shockingly weak 266,000 gain.
That April figure was close to 750,000 lower than forecasts, the largest “miss” in the history of the series.
NatWest Market economist Kevin Cummins noted that even with a rise of around 550,000 total payrolls would still be 7.7 million below the February 2020 level.
“The labor market would still be considered a long way from being recovered,” he added.
“In our opinion, the data are unlikely to convince Fed Chair Powell that progress has been substantial enough just yet to start signaling tapering.”
