You are using an older browser version. Please use a supported version for the best MSN experience.

Asia Pacific stocks set for positive start as U.S. jobs report beats expectations

CNBC logo CNBC 7/2/2020 Eustance Huang
  • Futures pointed to a positive start for stocks in Japan and Australia.
  • Nonfarm payrolls surged by 4.8 million in June, according to the U.S. Labor Department. The figure smashed expectations by economists surveyed by Dow Jones of a 2.9 million increase in jobs created.
  • The Labor Department also said, however, that initial jobless claims rose by 1.427 million in the week ending June 27. Economists polled by Dow Jones expected initial U.S. jobless claims to rise by another 1.38 million.
  • Looking ahead, a private survey of China's services sector activity for June is expected on Friday, with the Caixin/Markit services Purchasing Manager's Index set to be released around 9:45 a.m. HK/SIN.

Stocks in Asia Pacific were set for a positive Friday start after U.S. nonfarm payrolls released overnight beat expectations, raising optimism over the prospects of an economic recovery from the coronavirus pandemic.

Futures pointed to a higher open for Japanese stocks, with the Nikkei futures contract in Chicago at 22,335 while its counterpart in Osaka was at 22,310. That compared against the Nikkei 225's last close at 22,145.96.

Shares in Australia were also set for a positive start to their trading day. The SPI futures contract was at 6,048, as compared to the S&P/ASX 200's last close at 6,032.70.

Investors will watch for reaction to the overnight U.S. jobs print, where nonfarm payrolls surged by 4.8 million in June, according to the U.S. Labor Department. The figure smashed expectations by economists surveyed by Dow Jones of a 2.9 million increase in jobs created. The unemployment rate dropped to 11.1%, lower than the 12.4% forecast by economists surveyed by Dow Jones.

The Labor Department also said, however, that initial jobless claims rose by 1.427 million in the week ending June 27. Economists polled by Dow Jones expected initial U.S. jobless claims to rise by another 1.38 million.

National Australia's Bank's Rodrigo Catril wrote in a note that the nonfarm payrolls and jobless claims data "delivered contrasting images" of the state of the US labor market.

"While June data reflected a big improvement in the US labour market, the recent sharp acceleration in new virus cases plus the prospect of an end to unemployment benefits by the end of July are two big layers of uncertainty," Catril said. Numerous states in the U.S. have paused or reversed plans to ease restrictions as new coronavirus cases spiked countrywide. 

Looking ahead, a private survey of China's services sector activity for June is expected on Friday, with the Caixin/Markit services Purchasing Manager's Index set to be released around 9:45 a.m. HK/SIN.

Overnight on Wall Street, the  Dow Jones Industrial Average closed 92.39 points higher, or 0.4%, at 25,827.36. The Nasdaq Composite hit a record high, rising 0.5% to end its trading day at 10,207.63. The S&P 500 also gained 0.5% to close at 3,130.01. U.S. markets will be closed on Friday for the July Fourth holiday.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.317 after earlier rising from levels below 97.2.

The Japanese yen traded at 107.51 per dollar after seeing lows beyond 108 earlier in the trading week. The Australian dollar changed hands at $0.6923 following its rise this week from levels around $0.684.

Here's a look at what's on tap:

  •  China: Caixin/Markit services Purchasing Manager's Index at 9:45 a.m. HK/SIN

— CNBC's Fred Imbert contributed to this report.

AdChoices
AdChoices
AdChoices

More from CNBC

image beaconimage beaconimage beacon