Kospi Jumps, Following Wall Street, as Fed's Waller Signals Rate Hold

South Korea’s Kospi jumped 1.14 percent at Friday’s open. The rally tracked a broad Wall Street advance after Fed Governor Christopher Waller signaled a rate hold this month.

The benchmark index rose 74.88 points to 6,650. It extended a rebound after a sharp slide earlier this week tied to Middle East tensions.

Waller Comments Cool Rate Hike Worries

Waller made the remarks Thursday, saying he would be inclined to support a hold. He backed keeping rates in the current 3.5 percent to 3.75 percent range at the Fed’s Sept. 15-16 meeting.

Treasury yields eased on the remarks, feeding into falling rate hike odds tracked on prediction markets this week.

Japan’s Nikkei 225 and Hong Kong’s Hang Seng also opened higher. South Korea’s small-cap Kosdaq index advanced even more sharply.

Thursday’s rally set the tone across US markets. The Dow Jones Industrial Average gained 1.18 percent. It was the index’s best day since Aug. 4.

The S&P 500 added 1.06 percent, while the Nasdaq Composite rose 1.4 percent. All three indexes are on pace for a positive week.

Jobs Report Looms as Next Catalyst

Traders are now watching Friday’s August nonfarm payrolls report, the same data point that has repeatedly moved risk assets after recent monthly releases.

Economists polled by Dow Jones expect 53,000 jobs added. That compares with a loss of 23,000 jobs in July. Unemployment is expected to hold at 4.1 percent.

José Torres, senior economist at Interactive Brokers, said labor weakness should push the Fed toward easier policy.

Ongoing decreases in employment should be enough for the central bank to start considering the labor side of its mandate when prescribing policy.

— José Torres, Interactive Brokers, CNBC

Torres is also watching next week’s inflation reports. He flagged the consumer price index and producer price index.

The session rounded out a broadly positive day across the region. Friday’s jobs data could reinforce the dovish case or revive rate hike concerns. Either way, it will help set the tone heading into the Fed’s September meeting.