Europe to track Asia higher ahead of US jobs data

Friday 06:00 GMT

Overview

Asian markets were broadly positive on Friday as South Korea’s president was formally impeached, while Treasuries remained under pressure ahead of the US jobs report that could fuel expectations the Federal Reserve will raise interest rates next week.

European bourses are expected to open higher, with spreadbetters predicting the UK’s FTSE 100 will add 20 points to 7,335 and Germany’s Dax to climb 40 points to 12,018. US index futures suggest the S&P 500 will add 8 points to 2,373, when trading gets under way later in New York.

Hot topic

South Korea’s benchmark Kospi rose 0.2 per cent after Park Geun-hye was stripped of her presidency and formally ousted following a corruption scandal.

In an unanimous decision, magistrates upheld the legality of an earlier impeachment vote by the nation’s legislature, making Ms Park the first South Korean leader to be thrown from office.

The Korean won initially strengthened on the news but slipped back 0.1 per cent against the dollar to Won1,157.74.

“We believe that today’s decision will likely reduce political uncertainty and the market will now focus on the new government,” Nomura’s Young Sun Kwon said it a note.

Equities

Japan’s Topix index rose 1.1 per cent with gains across the board, while the Nikkei 225 was up 1.4 per cent.

Australia’s S&P/ASX/200 rose 0.6 per cent as financial stocks and the consumer staples sector gained.

The Hang Seng Index was flat as cable television network I-Cable Communications tumbled as much as 46 per cent after its parent company Wharf Holdings said it had scrapped plans to sell the lossmaking operator. Property developer Wharf’s stock jumped as much as 10 per cent as it said it was studying plans to reorganise its business splitting out its flagship properties business leading a 1 per cent gain in the real estate sector.

Chinese mainland markets were mixed, with the Shanghai Composite index flat while the Shenzhen Composite index gained 0.3 per cent.

Forex

The euro continued its rise on mildly hawkish remarks from European Central bank president Mario Draghi on Wednesday, gaining 0.2 per cent to $1.0601.

The dollar index tracking the currency against a basket of peers was flat at 101.89, while the yen weakened by 0.3 per cent against the dollar to ¥115.34.

The Australian dollar was up 0.2 per cent at $0.7518 following the release of data showing growth in Australian home loans accelerated in February as lending for property investment rebounded.

Fixed income

The yield on 10-year US Treasuries was up 1 basis point at 2.614 per cent after gaining 5 basis points on Thursday.

Australian 10-year bond yields rose 5 basis points to 2.976 per cent.

Commodities

International benchmark Brent Crude was up 0.7 per cent at $52.56 a barrel during Asia trading after falling for a second consecutive day on concerns over data showing record US stockpiles. US benchmark West Texas Intermediate struggled to recover after settling on Thursday below $50 a barrel for the first time since December, with the benchmark trading up 0.8 per cent at $49.68 a barrel.

Gold fell 0.3 per cent to $1,197.68 an ounce.

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