Wall Street closed lower on Friday as better than expected jobs report raised expectations of an interest rate hike. Labor department release said that U.S. market generated 280,000 new jobs in May, ahead of street’s expectation of 210,000 new jobs. This raised fears that even though June rate hike is off the table, a possible autumn hike could be seen. Key financial stocks including JPM ended in green on expectations that they would benefit from higher interest rates. European markets ended Friday’s session in the red as Greece opted to bundle its loan payments to the International Monetary Fund and make them at the end of the month. Recent sell-off in European bonds continued Friday, with bond yields edging higher.
In the Asian session on Monday morning, stocks managed to shed most of their opening losses Monday morning, shrugging off a drop for U.S. markets at the end of last week, with the Hang Seng off by 0.1%, moving off earlier lows as weak Chinese trade data for May suggested higher odds for more government stimulus. The data printed weaker than expected, showing a 17.6% fall in imports and a 2.5% drop for exports.
Japan posted a surplus in its current account for the 10th consecutive month in April on the back of an improved trade balance and strong income from overseas investments. Japan’s monthly current account surpluses have again surged to over one trillion in recent months as a fall in fuel prices has cut the country’s import bill, helping shrink the trade deficit. Japan posted a Y146.2 billion trade deficit in April, down 82% on year. The Japanese yen soared against the US dollar to trade at 125.44 as the yen gained 15 points against the strong dollar and against the euro the pair fell by 38 points as stress from Greece continued to weigh on the euro. The EURJPY is trading at 139.24. Gross domestic product, the broadest measure of the nation’s economic activity, expanded at an annualized pace of 3.9% in January-March, according to data released Monday by the Cabinet Office.
The disappointing data out of China had opposite effects on the Aussie and the kiwi, as the Australian dollar declined 6 points to 07616 while the kiwi added 12 points bouncing off its long term low seen on Friday as the pair traded at 0.7055 ahead of the Reserve Bank decision. China’s exports fell 2.5% in May from a year earlier in dollar terms, after a drop of 6.4% in April, data from the General Administration of Customs showed Monday. The May figure was better than the median forecast of a 5.0% decrease by 13 economists surveyed by The Wall Street Journal.
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