Title: Asia shares lifted by U.S. futures, oil climbs

Jun 06, 2022 02:01AM ET

By: AnalysisWatch

Asian shares joined US stock futures rising cautiously on Monday ahead of US inflation data this week, while the euro hit a seven-year high against the yen amid bets on European Central Bank policy tightening.

Oil prices rose after Saudi Arabia sharply increased the price of its crude sold in July, an indication of how tight supply is even after OPEC+ agreed to accelerate production increases over the next two months.

S&P 500 futures added 0.5% and Nasdaq futures added 0.6%. EUROSTOXX 50 futures gained 0.8% and FTSE futures gained 1.0%.

Chinese blue chips were up 1.3% aftter a survey confirmed a contraction in services sector activity in May, but the Caixin index was still up to 41.4 from 36.2.

Markets will be in suspense waiting for the US consumer price report on Friday, especially after EU inflation shocked many with a record high last week.

Forecasts suggest a sharp rise of 0.7% in May, although the annual rate will hold steady at 8.3% and core inflation will slow slightly to 5.9%.

Some analysts thought Friday's payrolls report suggested that the Fed was on track for a soft landing.

NOT SO NEGATIVE

Money markets are set for a 125bp rate hike by the end of the year and 100bp already in October.

The prospect of a positive rate hike this year has helped the euro rise to $1.0731, some distance from its recent low of $1.0348, although it has struggled to overcome resistance around $1.0786.

Against a basket of currencies, the dollar stood at 102.110 after strengthening 0.4% last week.

In commodity markets, wheat futures jumped 4% after Russia launched a rocket attack on Ukraine's capital, Kiev, dampening hopes of progress in peace talks.

Gold is stuck at $1,855 an ounce, holding in a narrow range for the past couple of weeks.

Oil prices got a boost after Saudi Arabia set higher prices for supply to Asia, while investors are betting that OPEC's planned supply increase will not be enough to meet demand, especially as China eases its restrictions.