Global Market Today: Asian shares rise as Fed hike bets ease, oil gains

Asian stocks experienced a rise as fears eased regarding the Federal Reserve's decision to continue raising interest rates, following a softer than anticipated US jobs report. Brent crude prices also increased due to Yemen's efforts to reclaim areas under Houthi control.

The MSCI’s Asia Pacific equities index gained 0.4%, with Japanese shares surging by 2%. Contracts for the Nasdaq 100 rose 0.3% after the underlying gauge closed at a record high on the previous Friday, while a US index of semiconductor shares rallied.

On Monday, Brent crude for December delivery surpassed $103 a barrel before slightly reducing its gains after the contract had risen nearly 5% in the previous week. The surge continued despite OPEC+ nations agreeing to maintain oil production quotas as planned for the following month.

The September US jobs data showed employers hired fewer workers in the preceding month than economists expected, with wage growth decelerating. Despite the weaker-than-expected figures, bond markets continued to face pressure as the probability of a Federal Reserve rate hike in October diminished to less than 25%, according to money market forecasts.

The US nonfarm payrolls rose by 29,000 in September after a revision downward for the previous two months, falling short of all estimates in a Bloomberg survey of economists. The unemployment rate increased to 4.2%, partly because of a growing labor force.

Shane Oliver, the chief economist and head of investment strategy at AMP Ltd., noted, "Not too hot, not too cold Goldilocks jobs data for September add to expectations that the Fed won’t rush into another rate hike this month."

In other news, the Brazilian real showed a slight improvement as a right-wing senator, Flávio Bolsonaro, surged to an unexpected lead over incumbent Luiz Inácio Lula da Silva in the first round of Brazil's presidential race. If confirmed, this result would make him the favorite in the runoff later in the month.

Gold prices remained relatively stable after recording its largest weekly loss since June, as higher bond yields counterbalanced expectations of a Federal Reserve rate hold. Meanwhile, the underwhelming jobs report triggered a brief surge in US Treasuries on Friday, but the bond market remains in a prolonged decline fueled by concerns about persistent inflation, government spending, and companies borrowing heavily to fund artificial intelligence initiatives.

Benchmark US 10-year yields reached their highest level since 2002 during last week's auctions of 10- and 30-year Treasuries. The Federal Reserve will release minutes of its September meeting on Wednesday, which may provide insights into policymakers' concerns about underlying price trends and expectations.

Investors are also closely monitoring potential contagion in Europe's government bond market following a recent sell-off that evoked memories of the region's debt crisis 15 years ago. "Global bond curves steepened over the past week, and the volatility we are seeing in fixed income yields is finally gaining attention in financial markets more broadly," Mark Dowding, the chief investment officer for fixed income at RBC BlueBay Asset Management, wrote in a note.

"Despite this, over the past several days, market fears for back-to-back central bank rate hikes have appeared to mitigate somewhat."