Asian Shares Rise as US Jobs Data Increases Fed Rate Hike Odds

Most Asian markets traded higher on Monday after U.S. jobs data revealed a tight labor market, bolstering expectations that the Federal Reserve will hike interest rates again at its meeting next month.

The Kospi in South Korea was up 1.04% as of 9:38 AM Bangkok time, making it the region’s best performer. The Nikkei 225 in Japan rose by 0.43%.

The Shanghai Composite Index dropped 0.1% in mainland China.

Australian and Hong Kong markets remained closed due to a four day Easter holiday till Monday.

U.S. stocks finished last week’s short trading week on Thursday with gains across all three main indices.

The S&P 500 increased by 0.36%, while the tech-heavy Nasdaq Composite increased by 0.76% due to gains in Alphabet and Microsoft.

After dropping more than 150 points at its session low, the Dow Jones Industrial Average recovered slightly by gaining 2.57 points, closing at 33,485.29.

Nonfarm payrolls grew by 236,000 last month, according to statistics released by the Labor Department on Friday, falling short of the 239,000 predicted by economists in a Reuters poll.

Pay increases fell from year to year, but still outpaced the U.S. Federal Reserve’s 2% inflation objective, according to the report’s findings.

Mansoor Mohi-uddin, the senior economist at the Bank of Singapore, has stated that the labor market is still too tight for the Fed to reduce inflation to its 2% target without further interest rate hikes.

Markets are now pricing in 66% chance of the Fed raising interest rates by 25 basis points in its May 2-3 meeting, according to CME FedWatch tool.