Asian Markets Surge on Weaker US Jobs Data

Asian stock markets surged on Monday following the release of weaker-than-expected US jobs data, which reduced expectations of a Federal Reserve interest rate hike this month. The US economy added only 29,000 jobs in September, significantly below the anticipated 90,000, while previous months' figures were also revised downward. This shift in outlook led markets to scale back rate hike bets, with the chance of a hike this month dropping to just over 20 percent from over 65 percent earlier in the week.

Tech-heavy markets benefited the most from the reduced rate hike expectations, as tech firms rely heavily on debt to fund their investments. Tokyo's Nikkei 225 jumped over 2 percent, reaching a new high since July, while Taipei and other regional markets also saw gains. Meanwhile, Hong Kong and Wellington experienced declines, and key markets like Seoul and Shanghai were closed for holidays.

Oil prices continued to fall, extending losses from the previous week, although declines were limited by news of a military operation in Yemen. The G7 leaders' decision to release 100 million barrels of oil from their reserves over four months also supported market sentiment by easing inflation concerns. Crude exports from the Middle East have returned to near pre-war levels, but diesel supplies remain tight due to refinery damage.

Government borrowing costs have risen sharply in recent weeks due to expectations of at least one more rate hike this year, driven by high inflation, government spending, and corporate borrowing for AI investments. Analyst Stephen Innes of SPI Asset Management noted that hiring trends have settled into a 'Goldilocks' zone of roughly 40,000 to 60,000 jobs a month, with inflation cooling noticeably in the short term.