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© Reuters. FILE PHOTO: People walk in front of a table displaying stock indexes in Tokyo
By Hideyuki Sano
TOKYO (Reuters) – US and Asian stock futures advanced on Monday after the United States dropped the threat of imposing tariffs on Mexico as part of an agreement to crack down on oil prices. Illegal migration from Central America, while weak employment data in the United States raised hopes of lower interest rates.
The Mexican peso jumped 1.75% in Monday morning trading to 19.2579 for a dollar on the announcement of the removal of the tariff threat.
Relief was, however, widespread, with global investors worried that the opening of a new trade dispute while struggling with China would tip the United States and other economies into recession.
The mini S & P 500 futures were up 0.4% and the 10-year US Treasury yield jumped 3 basis points to 2.115% after hitting a record high. hike of 2.053% Friday down over 21 months, thanks to weak employment data in the United States.
Japan rose 1.2% and South Korea's Kospi gained 0.55%, while Australian markets were closed for holidays. The MSCI index of Asia Pacific shares out of Japan has remained almost unchanged.
Improved risk sentiment also contributed to the dollar's rise against the yen by 0.15% to 108.38 yen.
"The agreement with Mexico is boosting investor sentiment, but expectations of US rate cuts will also support stock prices," said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui DS Asset Management.
"Nevertheless, with the limited progress seen so far in the US-China trade negotiations, which is the most important issue for the markets, stock prices will only increase much," he added. .
The Fed's rate-cutting expectations have kept the dollar on the defensive after a US Department of Labor report on job weakness.
Non-farm payrolls increased 75,000 jobs last month, well below the 185,000 additional jobs estimated by economists in a Reuters poll.
Wage growth, closely monitored for its impact on inflation, slowed to 3.1% from the previous year, the slowest annual increase since September. Just three months ago, wages had risen at their fastest pace in a decade.
Although federal funds' interest rate futures fell on Monday after the conclusion of the deal with Mexico, they still expect more than two 25 basis point declines in the rate. here the end of the year, including one almost entirely in July.
"I would expect optimism to prevail in the markets until the next Fed meeting," said Naoya Oshikubo, chief economist at Sumitomo Mitsui Trust Asset Management.
The next political meeting of the federal government is scheduled for next week, June 18-19.
The euro has changed little, at 1.1329 dollar near a peak of 1.1338 dollar reached for 2 and a half months on Friday. The common currency held near its five-month high against the pound sterling at 88.965 pence.
Gold fell 0.2%, but was not far from the peak of 1448.1 dollars per ounce hit its highest level in 14 months, close to a major resistance around 1350 dollars .
It was sweet. The title has traded at 6.9385 yuan for one dollar, after reaching its lowest level in seven months, at 6.9616 on Friday.
China's trade data, expected later in the day, will be closely watched by the impact of the Sino-US trade war.
Financial leaders of the Group of 20 said Sunday that trade and geopolitical tensions have "intensified", which could hinder the improvement of global growth, but they have not called to a resolution of the trade dispute that is intensifying between China and the United States.
Oil prices rose after Saudi Arabia said Friday that OPEC and non-member Russia were about to agree to an extension of production beyond June and that Wall Street was recovering.
Futures contracts rose 0.8% to $ 63.79 per barrel while futures contracts rose 0.8% to $ 54.44.
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