WORLDWIDE: HEADLINES
U.S. weekly jobless claims drop to fresh 14-month low; economic recovery gaining speed
The number of Americans filing new claims for unemployment benefits dropped more than expected last week as layoffs subsided, with companies desperate for workers to meet surging demand unleashed by a rapidly reopening economy.
The economy, which in the first quarter notched its second-fastest growth pace since the third quarter of 2003, is gaining speed, with other data on Thursday showing business spending on equipment accelerated in April. Activity is being boosted by the COVID-19 pandemic’s easing grip and nearly $6 trillion in relief provided by the government over the past year.
“The economy is off and running,” said Scott Hoyt, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “Going forward growth will be supported by the pent-up savings that households have amassed during the pandemic.”
Initial claims for state unemployment benefits fell 38,000 to a seasonally adjusted 406,000 for the week ended May 22, the Labor Department said. That was the lowest since mid-March 2020 and marked the fourth straight weekly decline in applications.
The decrease was led by Washington state, Florida and New Jersey. Economists polled by Reuters had forecast 425,000 applications for the latest week. Though claims remain well above the 200,000 to 250,000 range that is viewed as consistent with healthy labor market conditions, they have dropped from a record 6.149 million in early April 2020.
Pandemic-related restrictions on businesses have been rolled back, with more than half of adults in the United States fully vaccinated against COVID-19, leaving factories, construction sites, restaurants and bars, among many, clamoring for workers.
The labor shortage, despite nearly 10 million Americans being officially unemployed, has been blamed on the safety net, strengthened during the pandemic by the government, to provide a temporary lifeline following the unprecedented economic and human carnage caused by the virus.
Full coverage: REUTERS
JD Logistics shares soar 14% in Hong Kong debut
JD Logistics Inc’s (2618.HK) shares soared 14% in their stock market debut on Friday, a strong start for what is only the third mega listing in Hong Kong so far this year.
Shares of the subsidiary of Chinese e-commerce company JD.com (9618.HK) opened at HK$46.05 compared to the HK$40.36 price in their initial public offering (IPO). The city’s benchmark Hang Seng Index (.HSI) was up 0.36%.
JD Logistics raised $3.2 billion in its IPO, the second largest in Hong Kong in 2021 and only the third to raise more than $1 billion in the city this year.
The other two were Kuaishou Technology (1024.HK), which leapt 161% on debut in January, and Linklogis Inc (9959.HK), which gained 9.9% in April on opening day.
With the stock’s strong debut on Friday, JD Logistics has a market value of around $36 billion.
Full coverage: REUTERS
WORLDWIDE: FINANCE / MARKETS
Asian stocks extend global rally to 7th day, U.S. stimulus in focus
Asian stocks put global equities on course for a seventh day of gains on Friday as investors bet the U.S. will lead the world out of the COVID-19 pandemic, with the focus turning to a multi-trillion-dollar spending boost by the Biden administration.
Tokyo led the advance, with the Nikkei jumping 1.9% early in the session. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3%, hitting its highest level this month, though Chinese blue chips slipped 0.1% just after the open.
The MSCI world equity index added 0.1% to 709.71, nearing the all-time closing high of 710.36 set on May 7.
U.S. stocks were also poised for further gains after the S&P 500’s 0.1% rise overnight, with futures pointing to a 0.3% increase at the open.
On Thursday, data showed the number of Americans filing new claims for unemployment benefits dropped to the lowest since mid-March 2020, with companies desperate for workers to meet surging demand unleashed by a rapidly reopening economy.
A separate report confirmed a 6.4% acceleration in the annualized rate of economic growth last quarter, bolstered by massive fiscal stimulus.
The New York Times reported that President Joe Biden will seek $6 trillion in federal spending for the 2022 fiscal year, a day before the White House is expected to unveil its budget proposal.
Positive signals on the economy helped lift benchmark Treasury yields back above 1.6% overnight. The 10-year note yielded 1.6147% in Asia on Friday, from as low as 1.5520% mid-week.
The bump in yields weighed on tech shares, amid some shifting from growth- to value stocks.
The Dow Jones Industrial Average rose 0.4%, while the Nasdaq Composite slipped 0.3%.
Full coverage: REUTERS
British pound gains boost from BoE, dollar looks to inflation data
The British pound held firm near a three-month high against the dollar on Friday on rising expectations of an earlier than expected rate hike by the Bank of England, while the U.S. currency looks to upcoming inflation data.
The British pound held firm at $1.4203 after a gain of 0.58% on Thursday after a Bank of England policymaker said the central bank was likely to raise rates well into next year.
Gertjan Vlieghe also noted an increase could come earlier if the economy rebounds more quickly than expected.
Against the euro, the pound changed hands at 85.83 pence per euro, near its five-week high of 85.615 pence per euro. On the yen, the pound hit a three-year high of 156.02 yen.
The euro stood at $1.2192, hovering below its 5 1/2-month high touched on Tuesday of $1.2266 as dovish comments from European Central Bank officials sapped its momentum ahead of its policy meeting on June 10.
The dollar jumped to 109.85 yen, breaking out of its tight range over the past few weeks, to reach its highest levels in about seven weeks.
The jump likely reflected yen selling due to MSCI’s reshuffle of its standard stock index, from which nearly 30 Japanese names were dropped, analysts said. [.T]
The yen was hampered also by concerns about a delay in Japan’s economic recovery after media report that Japan is looking to extend a state of emergency in Tokyo and several other areas by three weeks to June 20.
Elsewhere, the offshore Chinese yuan fetched 6.3755 per dollar, having hit a three-year high of 6.3679 overnight on rising expectations the Chinese central bank is comfortable with a stronger currency amid the country’s economic recovery.
Full coverage: REUTERS
Brent nudges towards $70 on rosy U.S. data, oil demand outlook
Oil prices pushed higher on Friday, supported by firm U.S. economic data and expectations of a strong rebound in global fuel demand in the third quarter, while concerns eased about the impact of any return of Iranian supplies.
Brent crude futures for July gained 16 cents, 0.2%, to $69.62 a barrel by 0050 GMT while U.S. West Texas Intermediate crude for July was at $67.17 a barrel, up 32 cents, or 0.5%.
“Oil headed higher on robust U.S. economic data and growing sentiment that if the Iran nuclear deal is revived, it will not include an immediate removal of sanctions and that the oil market will not get quickly flooded with excess supplies,” OANDA analyst Edward Moya said in a note.
Brent and WTI are both on track to post weekly gains of 5% to 6% as analysts expect global oil demand to rebound closer to 100 million barrels per day in the third quarter on summer travel in Europe and the United States following widespread COVID-19 vaccination programs.
Robust economic data from the United States, the world’s largest economy and oil consumer, also buoyed risk appetite. The number of Americans filing new claims for unemployment benefits fell to the lowest since mid-March 2020, beating estimates.
Balancing expectations of a recovery in demand against a possible increase in Iranian supply, the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, is likely to stick to the existing pace of gradually easing oil supply curbs at a meeting on Tuesday, OPEC sources said.
Iran and global powers have negotiated in Vienna since April to work out steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with Iran’s 2015 nuclear pact with world powers.
Full coverage: REUTERS
