Asia shares tipped to firm, sterling hit by UK politics
FILE PHOTO: A man looks at an electronic stock quotation board outside a brokerage in Tokyo, Japan February 9, 2018. REUTERS/Toru Hanai
SYDNEY: Asian share markets looked set to bounce on Monday following favorable U.S. jobs data, while sterling slipped after a key member of the British government resigned over Brexit and put the future of Prime Minister Theresa May in doubt.The pound peeled off around a third of a U.S. cent to US$1.3288 in early trading as sources told Reuters British Brexit Secretary David Davis had resigned.
There were also reports Brexit Minister Steven Baker had gone as well, throwing into doubt a just-agreed cabinet deal on May's plans to leave the European Union.Sentiment in other markets was mostly positive after Friday's U.S. payrolls report showed tame wages and more people looking for work."The combination of rising employment and increased labor force participation suggests healthy but not tightening labor market conditions in June, something that will allow the Fed to continue to hike rates at a gradual pace," said Kevin Cummins, a senior U.S. economist at RBS.The balanced report helped Wall Street end the week in the black and Nikkei futures
pointed to a firmer start for Tokyo shares .
MSCI's broadest index of Asia-Pacific shares outside Japan was also expected to start modestly higher after a 0.7 percent rally on Friday when the launch of U.S. tariffs on Chinese imports came and went without too many fireworks."While trade tensions fan concerns about the future, incoming data show a soaring U.S. economy, a healthy labor market, and some rebound in Europe and Japan," said Barclays economist Michael Gapen."For now, overall policies and financial conditions still support growth and investment," he added. "A sharper-than-expected China slowdown from a domestic credit crunch and external trade tensions could be the main risk to global growth."The focus this week would be on Chinese data for June covering inflation, new loans and international trade. The United States also releases inflation figures while the Bank of Canada might well hike rates on Wednesday.
In currency markets, the U.S. dollar was mostly softer following the jobs report, with sterling being an exception.Against a basket of currencies the dollar had pulled back to 93.999 , from a top of 94.486 on Friday. The euro held its gains at US$1.1745 , while the dollar was flat on the yen at 110.41.In commodity markets, oil prices were quoted a shade firmer in early trade after a mixed end to last week.U.S. crude futures gained 4 cents to US$73.84 a barrel, while Brent rose 3 cents to US$77.14 a barrel.Gold was little changed at US$1,255.60 an ounce .(Editing by Shri Navaratnam)
Source : http://www.channelnewsasia.com/news/business/asia-shares-tipped-to-firm--sterling-hit-by-uk-politics-10511330