The euro falls after Macron’s setback, Topix climbs: the markets fall back

(Bloomberg) — The euro fell to its lowest level in nearly a month after French President Emmanuel Macron called for an early vote following European Parliament elections. Asian currencies fell on the heels of a strong US jobs report on Friday.

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The common currency fell as much as 0.3%, falling alongside French bond futures. A far-right party’s gains in the vote – which were in line with expectations – led Macron to call an early legislative vote for his country. Centrist parties were nevertheless expected to retain their majority in the European Union-wide vote.

The South Korean won and Malaysian ringgit fell in Asian trading, while the MSCI Asia-Pacific stock index was slightly lower. Japan’s Topix rose after data showed the country’s economy contracted less than initially expected.

Markets in China, Hong Kong, Taiwan and Australia were closed Monday for holidays.

The 10-year Treasury yield rose for a third day as a strong U.S. jobs report prompted a rethink of Federal Reserve interest rate cuts and eased concerns regarding an economic slowdown.

The latest U.S. jobs figures highlight a labor market that continues to defy expectations and soften the impact of high interest rates and prices on the economy.

“We still expect a soft landing in the United States. As long as that remains a scenario, I think Asian markets have upside potential,” Lorraine Tan, director of Asian equity research at Morningstar Inc., on Bloomberg Television.

Investors could learn more about the Fed’s determination to ease monetary policy when U.S. policymakers update their interest rate forecasts on Wednesday. The Bank of Japan’s next announcement is scheduled for Friday and economists expect it to keep monetary policy steady.

“Asian markets will take cues from the FOMC and BOJ meetings, as well as US CPI data, which will be released just hours before the Fed’s policy rate decision,” said Lloyd Chan, strategist currencies at Mitsubishi UFJ Financial Group Inc. “Asian currencies could face volatility amid rising U.S. yields.”

Oil stabilized after a weekly decline as the market digested OPEC+’s decision to restore supply, as traders eagerly await a series of key industry reports and the Fed’s decision on the matter. rate.

Also in the Middle East, Benny Gantz resigned from Israel’s emergency government and called for elections, criticizing Prime Minister Benjamin Netanyahu for his handling of the war against Hamas. His departure deprives the government of a moderate voice, leaving Netanyahu more dependent on his right-wing coalition partners.

Data coming this week also includes UK wage figures, China inflation and US consumer and producer price figures.

Some notable events this week:

  • Pakistan rate decision on Monday

  • Jobless claims in the United Kingdom, unemployment, Tuesday

  • China CPI, PPI Wednesday

  • Thailand rate decision Wednesday

  • Indian CPI, industrial production, Wednesday

  • UK monthly GDP, Wednesday

  • U.S. Mortgage Applications, CPI, Wednesday

  • FOM…

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