Asian shares edged down slightly but were still on track for a solid weekly rise, as investors awaited more US data later in the session for clues on the timing of the US Federal Reserve’s interest rate hike.
Asia-Pacific shares
MSCI’s broadest index of Asia-Pacific shares outside Japan was slightly lower, but still poised to gain about 0.6 per cent for the week. Japan’s Nikkei stock index added 0.5 per cent, set for a 1.5 per cent weekly rise.
On Wall Street, all three major indexes gained more than one per cent, and the S&P 500 closed at a record after US economic data painted an improving employment picture, but subdued producer price inflation quashed bets that the US central bank would raise interest rates sooner rather than later this year.
“It is some comfort that labour at least seems to be progressing well in Q2,’’ said Elsa Lignos, senior currency strategist at RBC. “But it will take more than one slightly better jobless claims number to turn USD around.’’
Industrial production data
Friday’s slated US releases include industrial production for April and the University of Michigan’s preliminary May reading on consumer sentiment.
“We never expected the Fed to tighten next month but we were hoping that they would set the stage for a move in September,’’ said Kathy Lien, managing director at BK Asset Management in New York.
“However, if data continues to miss, they may refrain from signalling a change in monetary policy three months forward,’’ she said in a note to clients.
The dollar was treading water, trying to stay afloat after sinking to a nearly five-month low on Thursday against a basket of rival currencies.
Dollar index
The dollar index edged down 0.1 per cent to 93.391. It fell as low as 93.133 on Thursday, its lowest since late January, pressured by a resurgent euro, which scaled a nearly three-month peak of $1.1445. The common currency last stood at $1.1406, steady from late U.S. levels.
The dollar was buying 119.31 Japanese yen, about 0.1 per cent higher on the day.
Spot gold
Spot gold traded near a three-month high and was on track for its biggest weekly gain in four months on receding expectations of a US hike, and as the greenback’s weakness made it more appealing to investors holding other currencies.
It was down about 0.2 per cent on the day at $1,219.30 an ounce but was on track for a weekly rise of more than 2 percent.
“Gold’s break over the technical 200-day moving average of $1,218 triggered further buying from momentum investors,’’ said HSBC analyst James Steel.
Crude oil
Crude oil futures edged down but were set to end the week slightly higher, buoyed by the weaker dollar, forecasts of lower US crude output, and a pick-up in global demand.
US crude shed about 0.2 per cent on the day to $59.74 a barrel but was on track to rise for a ninth week, which would be the benchmark’s longest winning streak since 1983.
Front-month Brent was down about 0.1 per cent at $66.65 but was on track for a weekly rise, after its 1.6 per cent drop last week interrupted a month-long rally.