Asian markets rise after report shows resilience in U.S. jobs

Markets were closed in Hong Kong and Sydney after last week ended with Good Friday holidays in many countries. U.S. futures
ES00,
-0.06%
and oil prices
CL.1,
-0.11%
advanced.

The highly anticipated report on U.S. employment showed hiring slowed more than expected but remained steady last month.

Friday’s jobs report showed that American employers added 236,000 jobs last month, a slowdown from February’s 326,000 and slightly below economists’ expectations. Wages, meanwhile, grew 0.3% from February to match expectations. But year-over-year wage gains slowed to 4.2% from 4.6%.

Asian central banks are also struggling to steer the delicate course of curbing inflation while avoiding putting economies into recession.

The Federal Reserve faces a tough decision over whether to raise interest rates to drive down inflation that’s still high or hold off given signs of a slowing economy.

“”I suspect we are entering the peak uncertainty phase around the Fed’s next move as investors debate if credit tightening from financial stress will be enough to warrant cuts or if we are heading for more hikes,” Stephen Innes of SPI Asset Management said in a commentary.

The U.S. stock market was closed in observance of Good Friday, as were many markets across Europe. That left the U.S. bond market as one of the few open to react to the latest jobs update.

The immediate reaction from the bond market seemed to lean toward another hike. Not only did yields rise for Treasurys, so did bets for the Fed to raise rates by another quarter of a percentage point in May at its next meeting.

The yield on the 10-year Treasury climbed to 3.40% from 3.30% late Thursday. It was at 3.37% early Monday.

A cooler job market is exactly what the Fed is trying to achieve. Raising rates is one of the Fed’s most effective ways to undercut inflation, but it’s a notoriously blunt tool that works only by slowing the entire economy. That raises the risk of a recession and hurts prices for stocks, bonds and other investments.

More data are coming this week, with the latest monthly update on prices consumers are paying on Wednesday. Economists expect it to show inflation slowing but well above the Fed’s target.

Many economists see a recession later this year as likely. But some say a narrow possibility still exists where the Fed could raise rates just enough to get inflation fully under control without causing a severe recession.

In other trading, U.S. benchmark crude
CLK23,
-0.11%
picked up 7 cents to $80.77 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude
BRNM23,
-0.19%,
the international standard, edged 1 cent higher to $85.13 per barrel.

The dollar
USDJPY,
+0.33%
rose to 132.57 Japanese yen from 132.16 yen.