Asia stocks rally on renewed global rate cut optimism
Asian stocks rose on Friday, on course for a third week of gains, while the dollar was on the back foot as fresh signs of an easing U.S. labour market stoked optimism around interest rate cuts this year ahead of next week's crucial inflation data.
Sterling was steady at $1.2515, having touched over two-week low of $1.2446 on Thursday after Bank of England (BoE) paved the way for the start of rate cuts as soon as next month.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.66% and was on course for a nearly 1% gain for the week, its third straight week of gains. Japan's Nikkei was 1.6% higher.
China stocks also gained, with blue-chip shares 0.14% higher, while Hong Kong's Hang Seng Index rose 1.4%, having touched an eight month high in early trading.
Data on Thursday showed U.S. initial claims for state unemployment benefits increased more than expected by 22,000 to a seasonally adjusted 231,000 for the week ended May 4, the Labor Department said.
The figures follow last week's report showing U.S. job growth slowed more than expected in April and the increase in annual wages fell below 4.0% for the first time in nearly three years.
«After a period of remarkable strength and resilience, signs are growing that the U.S. labour market may be starting to soften,» said Ryan Brandham, head of global capital markets, North America at Validus Risk Management.
Brandham said the softer labour market should help the Fed in the fight against inflation, even if the central bank is hoping to tame prices
