Stocks in Asia look set for a cautious start Friday following a jump in the dollar ahead of key US jobs data that could stir expectations for another sharp Federal Reserve interest-rate hike.
(Bloomberg) — Stocks in Asia look set for a cautious start Friday following a jump in the dollar ahead of key US jobs data that could stir expectations for another sharp Federal Reserve interest-rate hike.
Futures rose for Japan and Australia but slipped for Hong Kong. US contracts fluctuated after Wall Street snapped a four-day losing streak despite a slide in chip stocks on concerns that exports to China are imperiled by new US rules.
The jobs update Friday is expected to show healthy payrolls growth and follows a stronger-than-expected US manufacturing report. Traders increasingly anticipate another large 75 basis points Fed rate rise to cool inflation.
Treasury yields climbed Thursday against that backdrop and a dollar gauge hit a record high. The yen through the closely watched 140 per dollar mark.
Oil held a slide to about $86 a barrel. China’s move to lock down the metropolis of Chengdu to curb Covid amplified worries about the demand outlook — concerns that are also weighing on industrial metals.
Global shares are set for their worst week since June, roiled by ebbing bets on tempered Fed tightening after US central bank officials made it clear they see the need for restrictive monetary settings for some time. While economic growth risks abound, the equity slide might encourage some dip buying.
“We don’t have a lot of reasons to be bullish in this type of environment for the next couple of weeks and months,” Meera Pandit, global market strategist at JPMorgan Asset Management, said on Bloomberg Television. “Yet when we think about the longer term perspective and the longer term investor, these are the types of level that can be fruitful in the long run.”
US data showed manufacturing growth steadied in August and that a measure of materials costs fell for a fifth month in a sign of easing inflation pressures.
The payrolls report later Friday is projected to show a 298,000 gain and solid wage growth. Federal Reserve Bank of Atlanta President Raphael Bostic said there’s still some work to do to contain price pressures.
Here are some key events to watch this week:
- ECB Governing Council members due to speak at event Tuesday through Sept. 2
- US nonfarm payrolls, Friday
- UK leadership ballot closes Friday. Winner announced Sept. 5
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Some of the main moves in markets:
Stocks
- S&P 500 futures were steady as of 7:17 a.m. in Tokyo. The S&P 500 rose 0.3%
- Nasdaq 100 futures were up 0.1%. The Nasdaq 100 was little changed
- Nikkei 225 futures rose 0.6%
- Australia’s S&P/ASX 200 futures rose 0.3%
- Hang Seng Index futures fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was at $0.9945
- The Japanese yen was at 140.20 per dollar
- The offshore yuan was at 6.9151 per dollar
Bonds
- The yield on 10-year Treasuries advanced six basis points to 3.25%
Commodities
- West Texas Intermediate crude fell 0.2% to $86.40 a barrel
- Gold was at $1,695.97 an ounce
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