Asian Markets Trade Mostly Higher

Asian stock markets are trading mostly higher on Monday, following the mixed cues from Wall Street on Friday, on renewed optimism about the outlook for interest rates as recent data pointed to some softness in the U.S. labor market, increasing the chances of the US Fed lowering interest rates in the coming months. Asian markets closed mostly higher on Friday.

Traders also remain cautious ahead of the crucial U.S. inflation data later this week that could offer important clues on the Fed’s rate trajectory. While the Fed is still widely expected to leave interest rates unchanged in June, there is a 74.2 percent chance rates will be lower by September, according to CME Group’s FedWatch Tool.

The Australian stock market is currently trading slightly lower on Monday, giving up some of the gains in the previous session, with the benchmark S&P/ASX 200 staying above the 7,400.00 level, following the mixed cues from Wall Street on Friday, with losses in technology and financial stocks.

The benchmark S&P/ASX 200 Index is losing 15.60 points or 0.20 percent to 7,733.40, after hitting a low of 7,749.00 earlier. The broader All Ordinaries Index is down 16.60 points or 0.21 percent to 8,006.10. Australian stocks closed modestly higher on Friday.

Among the major miners, Rio Tinto is edging down 0.4 percent and Mineral Resources is losing almost 1 percent, while BHP Group and Fortescue Metals are edging up 0.1 to 0.5 percent each

Oil stocks are mixed. Beach energy is edging up 0.2 percent and Origin Energy is gaining more than 1 percent while Woodside Energy is declining almost 1 percent and Santos is losing more than 1 percent.

Among tech stocks, Xero is declining almost 1 percent, Appen is losing more than 2 percent, Afterpay owner Block is slipping almost 3 percent and Zip is down almost 2 percent, while WiseTech Global is gaining almost 2 percent.

Gold miners are mixed. Gold Road Resources and Newmont are edging up 0.1 to 0.3 percent each, while Northern Star Resources is gaining almost 1 percent. Resolute Mining is declining more than 1 percent. Evolution Mining is flat.

Among the big four banks, Commonwealth Bank and National Australia Bank are edging down 0.1 to 0.3 percent each, while Westpac is losing almost 1 percent. ANZ Banking is declining almost 4 percent after The Australian Financial Review reported it is being investigated by the corporate regulator over concerns its traders manipulated the sale of government debt last year.

In other news, shares in Lendlease have fallen 4 percent after the Property group confirmed it has been hit with a $112 million tax bill from the Australian Taxation Office, connected to a tax dispute over its retirement living business.

In the currency market, the Aussie dollar is trading at $0.660 on Monday.

The Japanese stock market is trading slightly higher on Monday, adding to the gains in the previous session. The benchmark S&P/ASX 200 is staying above the 38,200 level, following the mixed cues from Wall Street cues on Friday, with gains in index heavyweights and financial stocks.

The benchmark Nikkei 225 Index closed the morning session at 38,243.59, up 14.48 or 0.04 percent, after touching a high of 38,273.40 and a low of 37,969.58 earlier. Japanese shares ended modestly higher on Friday.

Market heavyweight SoftBank Group is gaining almost 3 percent, while Uniqlo operator Fast Retailing is edging down 0.2 percent. Among automakers, Honda is gaining 2.5 percent, while Toyota is losing almost 1 percent.

In the tech space, Screen Holdings is edging up 0.5 percent and Advantest is gaining more than 1 percent. Tokyo Electron is flat.

In the banking sector, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are gaining more than 1 percent each, while Mizuho Financial is edging up 0.4 percent.

The major exporters are mixed. Canon is edging down 0.3 percent and Mitsubishi Electric is losing almost 1 percent, while Sony is gaining more than 2 percent and Panasonic is adding almost 1 percent.

Among other major gainers, Minebea Mitsumi is soaring more than 6 percent, Olympus is surging more than 5 percent, Shizuoka Financial is gaining more than 4 percent, NH Foods is adding almost 4 percent and KDDI is up more than 3 percent while Shiseido, Murata Manufacturing and Toto are advancing almost 3 percent each.

Conversely, Comsys Holdings is plummeting more than 8 percent, Secom is plunging more than 7 percent, Mitsui Fudosan is slipping almost 7 percent and Kubota is losing more than 5 percent, while Mitsubishi Estate, OKUMA and Mazda Motor are sliding almost 5 percent each. Daiwa House Industry is declining more than 4 percent, while Hitachi Zosen, Dowa Holdings and Haseko are down almost 4 percent each. Tokyo Tatemono, Yamaha, Taisei and Alps Alpine are losing more than 3 percent each.

In economic news, The M2 money stock in Japan was up 2.2 percent on year in April, the Bank of Japan said on Monday – coming in at 1,260.1 trillion yen. That was shy of expectations for an increase of 2.5 percent, which would have been unchanged from the March reading.

The M3 money stock rose an annual 1.6 percent to 1,612.8 trillion yen, slowing from 1.8 percent in the previous month. The L money stock was up 1.8 percent on year at 2,144.4 trillion yen, slowing from 2.2 percent a month earlier.

In the currency market, the U.S. dollar is trading in the higher 155 yen-range on Monday.

Elsewhere in Asia, Hong Kong, Singapore, Malaysia, Taiwan and Indonesia are higher by between 0.1 and 0.7 percent each. New Zealand is down 1.0 percent, while China and South Korea are down 0.2 percent each.

On Wall Street, stocks moved to the upside early in the session on Friday but showed a lack of direction over the remainder of the trading day. The major averages eventually ended the day mixed, although the Dow closed higher for the eighth consecutive session.

While the tech-heavy Nasdaq edged down 5.40 points or less than a tenth of a percent to 16,340.87, the S&P 500 crept up 8.60 points or 0.2 percent to 5,222.68 and the Dow rose 125.08 points or 0.3 percent to a new one-month closing high of 39,512.84.

Meanwhile, the major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index advanced by 0.6 percent, the German DAX Index and the French CAC 40 Index climbed by 0.5 percent and 0.4 percent, respectively.

Crude oil prices fell on Friday, on concerns the Federal Reserve may keep interest rates higher for a longer period, and uncertainty about the outlook for oil demand due to signs of slowing economic growth. West Texas Intermediate Crude oil futures for June sank $1.00 at $78.26 a barrel.