SYDNEY, Aug 8 — Asian share markets were subdued today and the dollar held firm after a stunning US payrolls report pushed back against talk of recession but also bolstered the case for more super-sized rate hikes.
“Despite sluggish growth and an expected slide to a 0.2 per cent m/m July CPI gain, the Fed will likely raise policy rates 75 bps at its September meeting,” said Bruce Kasman, head of economic research at JPMorgan. Bonds also got a safe-haven bid due to unease over Beijing’s sabre rattling against Taiwan as China conducts four days of military exercises around the island.
“This key data point is a million miles from a current recession, both on a change of employment, and a levels of unemployment basis,” said Alan Ruskin, global head of G10 FX strategy at Deutsche Bank.