(Bloomberg) — The euro fell to its weakest in almost a month after French President Emmanuel Macron called a snap vote in the wake of European Parliament elections. Asian currencies fell after a strong US jobs report on Friday.
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The common currency fell as much as 0.3%, retreating alongside French bond futures. Gains for a far-right party in the elections – which were in line with expectations – prompted Macron to call a snap legislative vote for his country. Still, centrist parties would retain their majority in the European Union-wide elections.
The South Korean gained and the Malaysian ringgit fell in Asian trading, while MSCI’s Asia-Pacific stock index was slightly lower. Japan’s Topix rose after data showed the country’s economy shrank less than initially estimated.
Markets in China, Hong Kong, Taiwan and Australia were closed on Monday for public holidays.
Ten-year Treasury yields rose for a third day after a solid U.S. jobs report prompted a reconsideration of Federal Reserve rate cuts and eased concerns about an economic slowdown.
The latest US jobs figures highlight a labor market that continues to defy expectations and weaken the impact on the economy of high interest rates and prices.
“We still expect a soft landing in the United States – as long as that is a scenario, I think Asian markets have upside potential,” Lorraine Tan, director of Asia equity research at Morningstar Inc., said on Bloomberg Television on Monday.
Investors can learn more about the Fed’s decision to ease monetary policy when U.S. policymakers update their interest rate forecasts on Wednesday. The Bank of Japan’s next announcement is scheduled for Friday, and economists expect this to keep policy steady.
“Asian markets will rely on the FOMC and BOJ meetings, as well as US CPI data, which will be released just hours before the Fed’s interest rate decision,” said Lloyd Chan, currency strategist at Mitsubishi UFJ Financial Group Inc. “Asia FX could see volatility amid rise in US yields.”
Oil held steady after a weekly decline as the market digested OPEC+’s decision to restore supply, while traders look ahead to a series of key sector reports and the Fed’s interest rate decision.
Also in the Middle East, Benny Gantz resigned from Israel’s emergency government and called for elections, criticizing Prime Minister Benjamin Netanyahu for his handling of the war against Hamas. His departure deprives the government of a moderate voice, making Netanyahu more dependent on his right-wing coalition partners.
This week’s next highlights also include UK wage figures, Chinese inflation and US consumer and producer price figures.
Some important events this week:
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Tariff decision Pakistan, Monday
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UK unemployment claims, unemployment, Tuesday
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China CPI, PPI Wednesday
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Thailand tariff decision, Wednesday
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India CPI, industrial production, Wednesday
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UK monthly GDP, Wednesday
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US Mortgage Applications, CPI, Wednesday
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FOMC decision, quarterly review of economic projections, Fed Chairman Jerome Powell press conference, Wednesday
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Australian unemployment, Thursday
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Industrial production in the eurozone, Thursday
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US unemployment claims, PPI, Thursday
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John Williams of the New York Fed will moderate the discussion with US Treasury Secretary Janet Yellen on Thursday
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Tesla annual meeting, Thursday
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Japan interest rate decision, Friday
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US consumer confidence, Michigan, Friday
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Austan Goolsbee of the Chicago Fed and Fed Governor Lisa Cook, Friday
Some of the major moves in the markets:
Shares
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Futures on the S&P 500 were little changed at 10:18 a.m. Tokyo time
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Nikkei 225 futures (OSE) rose 0.5%
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S&P/ASX 200 futures fell 0.6%
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Japan’s Topix rose 0.6%
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Euro Stoxx 50 futures fell 0.4%
Currencies
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The Bloomberg Dollar Spot Index rose 0.1%
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The euro fell 0.2% to $1.0779
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The Japanese yen fell 0.1% to 156.91 per dollar
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The offshore yuan was little changed at 7.2641 per dollar
Cryptocurrencies
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Bitcoin fell 0.2% to $69,573.01
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Ether fell 0.2% to $3,690.86
Bonds
Raw materials
This story was produced with the help of Bloomberg Automation.
–With assistance from Stephen Kirkland.
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