Precise Investors Editorial Team
South Korean stocks rose 1.3%, MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.4%, while Chinese blue chips gained 0.7%
Most share markets rose in Asia on Monday while the dollar eased as investors braced for a possible shutdown of the U.S. government, which would in turn delay publication of the September payrolls report and a raft of other data.
Japan’s Nikkei slid 0.8%, but was still 5% higher for September so far. Investors are waiting to see who will emerge as the new leader of the ruling LDP in a vote this weekend, with implications for fiscal and monetary policy.
South Korean stocks rose 1.3%, bringing their gains for the month to 7.6%. MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.4%, to be up almost 4% for the month.
Chinese blue chips gained 0.7%, ahead of the Golden Week holidays which begin on Wednesday.
If the (U.S.) shutdown lasts beyond the Fed meeting, the Fed will rely on private data for its policy decisions, analysts at BofA wrote in a note. On the margin, we think this may lower the likelihood of an October cut, but only marginally.
Markets imply a 90% chance of a central bank cut in October, with around a 65% chance of another in December.
The BofA analysts estimated a shutdown would subtract only a slight 0.1 percentage point from economic growth for every week it lasted, while noting the impact on financial markets had been minimal in the past.
They cautioned that should the government use the closure to lay off workers permanently, then it could have a more meaningful impact on payrolls and consumer confidence.
U.S.’ S&P 500 futures rose 0.2%, while Nasdaq futures firmed 0.3%, having eased modestly last week. Europe’s EUROSTOXX 50 futures gained 0.3%, as did UK’s FTSE futures and France’s DAX futures.
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