Asian Stocks Edge Up as Soft Jobs Data Tempers Rate-Hike Bets

Asian share markets opened the week on a positive note, tracking Wall Street's record close after a softer-than-expected US jobs report reduced the likelihood of an imminent interest rate hike. Japan's Nikkei advanced 0.6%, South Korea's KOSPI added 0.5%, and MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.3%.

However, gains were tempered by ongoing uncertainty in the Gulf. Iran indicated that a deal with Oman on shipping lanes in the Strait of Hormuz is in its final stages but reiterated that the waterway would only fully reopen once the US meets other conditions. This kept oil prices firm, with Brent crude rising 0.9% to $84.32 a barrel and US crude up 0.7% to $78.74.

The renewed fuel cost pressure raises the stakes for Wednesday's US consumer price index (CPI) report. Analysts expect a 0.1% rise in headline inflation and 0.2% for core inflation. A stronger-than-expected print could revive speculation of a Federal Reserve rate hike next month. Futures markets have already pared the probability of a September move to around 44%, down from 67% a week ago.

In Europe, EUROSTOXX 50 and DAX futures dipped 0.1%, while FTSE futures fell 0.4%. US futures were mixed, with S&P 500 futures down 0.1% and Nasdaq futures flat after a 5% gain last week.

Corporate earnings remain a bright spot. With nearly 90% of S&P 500 results reported, earnings per share are up 30% year-on-year, excluding investment gains at Alphabet and Amazon. The 76% beat rate matches the strongest level since 2021, with AI-related stocks showing median EPS growth of 28% versus 12% for non-AI names.

In bond markets, 10-year Treasury yields edged up to 4.673% ahead of $125 billion in new issuance this week. The dollar remained broadly soft, with the euro near a seven-week high at $1.1557 and the yen steady at 157.85. Gold held at $4,342 an ounce, supported by lower yields.