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GLOBAL MARKETS-Asia shares rally as U.S. job data revive risk appetite

Published 2018-03-11, 10:35 p/m
© Reuters.  GLOBAL MARKETS-Asia shares rally as U.S. job data revive risk appetite
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* Nikkei up 1.5 pct, leads Asia higher after Wall St jump

* Market sees best of both worlds in strong U.S. jobs, soft wages

* Investors await more detail on possible Trump/Kim meeting

By Wayne Cole

SYDNEY, March 12 (Reuters) - A relief rally swept across Asian share markets on Monday after the latest U.S. jobs report managed to impress with its strength while also easing fears of inflation and faster rate hikes, a neat feat that whetted risk appetites globally.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 1.1 percent, for a third session of gains.

South Korea .KS11 rose 1 percent while Australia's main index added 0.7 percent, boosting by mining shares on news that Australia could be exempt from new U.S. trade tariffs on steel and aluminium imports.

E-Mini futures for the S&P 500 ESc1 put on another 0.3 percent.

Japan's Nikkei .N225 jumped 1.5 percent, showing little immediate reaction as Prime Minister Shinzo Abe came under renewed fire over suspicions of cronyism involving the sale of state-owned land. worries faded on Friday after U.S. data showed nonfarm payrolls jumped by 313,000 jobs last month, but annual growth in average hourly earnings slowed to 2.6 percent after a spike in January.

The pullback in wages tempered speculation the Federal Reserve would project four rate hikes - or dot plots - at its policy meeting next week, instead of the current three.

"The release threaded the stock needle perfectly, exhibiting strong overall net job adds alongside an increase in the participation rate and tepid wages suggesting labour demand is being met by new entrants into the workforce," said analysts at JPMorgan (NYSE:JPM) in a note.

"In reality though the market is probably reading too much into a single jobs report," they cautioned.

"A fourth dot on March 21 may have been averted but the labour market is increasingly demonstrating evidence of tightness and this will inevitably translate into upside wage pressure."

For now, Wall Street was happy to take the data at face value and the Dow .DJI jumped 1.77 percent, while the S&P 500 .SPX gained 1.74 percent and the Nasdaq .IXIC 1.79 percent.

On the week, the S&P rose 3.5 percent, the Dow 3.25 percent and Nasdaq 4.2 percent.

The jobs news likewise lifted riskier currencies, including the Mexican peso and Canadian and Australian dollars, while weighing on the safe-haven yen.

Those cross currents left the U.S. dollar a shade lower against a basket of currencies at 90.028 .DXY . The euro was last up a fraction at $1.2317 EUR= , sandwiched between support at $1.2270 and resistance at $1.2296.

The dollar edged down on the yen to 106.58 JPY= , having bounced 0.5 percent on Friday.

Investors had trimmed holdings of yen last week on news U.S. President Donald Trump was prepared to meet with North Korea's Kim Jong Un, a potential breakthrough in nuclear tensions in the region. officials on Sunday defended Trump's decision, saying the move was not just for show and not a gift to Pyongyang.

The mix of brisk U.S. economic growth and restrained inflation was a positive one for most commodities, with industrial metals and oil performing well.

Spot gold XAU= was steady on Monday at $1,323.60 an ounce.

Brent crude LCOc1 futures rose 21 cents to $65.70 a barrel, after surging almost 3 percent on Friday. U.S. crude CLc1 futures rose 16 cents to $62.20 a barrel.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ MSCI and Nikkei chart

http://reut.rs/2sSBRiD

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Sam Holmes and Kim Coghill)

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