SYDNEY, Sept 7 — Asian technology stocks advanced on Monday after a stronger-than-expected U.S. jobs report lifted expectations for global economic growth, even as the data reduced the likelihood of higher interest rates. Oil prices also moved higher following attacks by the U.S. and Iran on ships in the Gulf.
Tehran said it would announce a restricted zone outside the Strait of Hormuz in the coming days. The announcement followed U.S. forces striking three Iranian tankers, while Iran’s Islamic Revolutionary Guard Corps fired ballistic missiles at two U.S. Navy ships.
Brent crude rose 1.1% to $97.37 a barrel after climbing almost 8% last week. U.S. crude gained 1.2% to $92.57 a barrel.
The rise is unfavorable for diesel prices, which reached record highs last week. Diesel is particularly important to transportation, shipping, farming and manufacturing.
Higher energy costs could add to inflationary pressure ahead of a closely watched U.S. consumer-price reading this week. They are also a major factor behind expectations that the European Central Bank will raise interest rates to 2.75% on Thursday. Futures markets indicate a 75% chance of another increase to 3.0% by December.
European equities were expected to remain sensitive to the possibility of hawkish guidance from the ECB following its rate decision. EUROSTOXX 50 futures, DAX futures and FTSE futures each fell 0.1%.
Trading was subdued on Wall Street because of a U.S. holiday. S&P 500 futures slipped 0.1%, while Nasdaq futures gained 0.1%.
Investors are also awaiting the U.S. August CPI report on Friday. Median forecasts call for core consumer prices to increase 0.2%, although a 0.3% rise remains a possibility.
In Asia, technology stocks helped drive gains. Japan’s Nikkei rebounded 2.0%, recovering after a similar decline last week, while South Korea’s Kospi rose 4.3%.
Some traders cited a highly bullish forecast from Goldman Sachs calling for the Kospi to climb another 75% to 12,000, although the firm has held that view for some time.
Chinese blue-chip stocks gained 0.2%, helped in part by expectations that China’s finance ministry will lead a combined $54 billion capital injection into state-owned insurers and banks.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5%.
Higher bond yields continued to weigh on equity valuations. The yield on 10-year U.S. Treasuries remained close to its highest level since late 2023 at 4.7840%. A stronger-than-expected CPI reading could push yields closer to the psychologically important 5.0% level.
For the Federal Reserve, last week’s strong payrolls data has led markets to price in a 58% chance of a rate hike at its September 16 meeting and a 70% chance of a move in October.
CENTRAL BANKS ‘ON THE MOVE’
Bruce Kasman, global head of economics at JPMorgan, expects core CPI to increase 0.21%, which he believes would be sufficiently low to allow the Fed to remain on hold, at least for now.
Markets are also pricing in a 75% probability that the Bank of Japan will raise rates by a quarter point at its September 18 meeting, with a 60% chance of another increase by December.
“Central bank patience through the energy shock has been supportive of asset prices and the credit cycle,” Kasman said. “However, central banks are now on the move.”
“We forecast two more hikes from the ECB and BoJ before year-end,” he added. “There is also a strong case for the Fed to move earlier and more aggressively than our baseline forecast for a December hike.”
In foreign exchange markets, the dollar index received only a modest boost from the jobs report as concerns over rising U.S. debt and policy uncertainty continued to weigh on the currency’s purchasing power.
President Donald Trump stirred markets on Friday by warning that he would halt international trade with countries running trade surpluses with the United States if the Fed failed to cut interest rates as he wanted.
The dollar index stood at 99.135, remaining close to recent lows of 98.558. The euro was steady at $1.1610, near its August high of $1.1711.
The euro also faced political uncertainty after Germany’s far-right Alternative for Germany (AfD) won the most votes in state elections in Saxony-Anhalt on Sunday, although it did not secure a majority.
The dollar edged down to 156.04 yen and remained close to major support at 155.00. The greenback had fallen 2.4% last week as the yen strengthened amid speculation that the BoJ could pursue more aggressive monetary tightening.
Gold declined 0.3% to $4,411 an ounce after finding support at $4,282 last week.
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