Shares in Asia are set for a muted open before a monthly US payrolls report that will help define the path forward for Federal Reserve interest rates.
Equity futures for Japan, Australia and Hong Kong edged higher, indicating a tepid opening for the region’s shares. The S&P 500 fell 0.1% Thursday while the tech-heavy Nasdaq 100 slipped 0.4%, though both were well off their lows for the day. Futures contracts for the two US benchmarks were little changed in early Asian trading. China markets remain shut for a holiday.
Treasuries were mixed in New York trade with 10-year yields edging lower while those on their 30-year counterparts gaining three basis points. Bloomberg’s index of the dollar fell for a second day.
Friday’s nonfarm payrolls report is expected to show US employers slowed hiring in September. Separate employment data this week provided a discordant narrative. The so-called JOLTS job-openings figures overshot estimates for August, while a measure of private employment from ADP came in weaker than forecast. Jobless claims also remain at historically low levels.
“Friday’s payrolls data, and next week’s inflation number, will decide whether the 10-year Treasury yield goes up to 5% or down to 4.5%,” said Kenneth Broux, a strategist at Societe Generale in London. A higher-than-forecast jobs number may trigger “another wave of dollar-buying and bond-selling,” he said.
Traders have record sums riding on the outcome of November’s Fed meeting as investors and policymakers debate the likelihood of a further rate increase this year.
San Francisco Fed President Mary Daly, who doesn’t vote of the Fed’s rate-setting committee this year, said the central bank may hold rates if inflation and the jobs market cools.
The International Monetary Fund now sees higher odds of the global economy averting recession, according to Managing Director Kristalina Georgieva. Still, the fund warned that growth remains uneven and weaker than before the pandemic.
In Asia, the Reserve Bank of India is forecast to keep interest rates unchanged in a monetary policy decision due Friday. Data for release in the region includes household spending in Japan.
In commodities, oil fell Thursday on concern slowing global growth will hit demand. Goldman Sachs Group Inc. predicts the decline will be fleeting. Gold steadied after a run of declines, while bitcoin traded around $27,500.
Key events this week:
- China has week-long holiday
- Germany factory orders, Friday
- US unemployment rate, nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 7:17 a.m. Tokyo time. The S&P 500 fell 0.1%
- Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.4%
- Nikkei 225 futures rose 0.1%
- Hang Seng futures rose 0.5%
- S&P/ASX 200 futures were little changed
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro was little changed at $1.0549
- The Japanese yen was little changed at 148.47 per dollar
- The offshore yuan was little changed at 7.3049 per dollar
Cryptocurrencies
- Bitcoin fell 0.3% to $27,409.76
- Ether fell 0.2% to $1,613.7
Bonds
- The yield on 10-year Treasuries declined one basis point to 4.72%
- Japan’s 10-year yield was unchanged at 0.800%
- Australia’s 10-year yield advanced two basis points to 4.59%
Commodities
- West Texas Intermediate crude rose 0.4% to $82.63 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
