Asian Equities Set to Fall After US Rally Reverses: Markets Wrap

Asian shares were poised to decline Monday after a mixed US jobs report and a reversal of gains on Wall Street that saw the S&P 500 lose a near 1% gain.

(Bloomberg) — Asian shares were poised to decline Monday after a mixed US jobs report and a reversal of gains on Wall Street that saw the S&P 500 lose a near 1% gain.

Futures for benchmarks in Japan, Australia and Hong Kong slid, as did an index of US-listed Chinese stocks. The S&P 500 ended Friday 0.5% lower as Apple Inc. dropped almost 5% as its outlook sparked worries over tepid demand. By contrast, Amazon.com Inc. climbed over 8% on a bullish revenue forecast. US futures rose slightly early Monday.

The greenback traded in narrow ranges versus most of its Group-of-10 counterparts as the trading week got underway after sliding Friday as Federal Reserve officials debate whether additional interest-rate hikes are needed. 

The yen was steady around 141.75 to the dollar after strengthening about 0.6% Friday. Investors are awaiting a summary of opinions from the Bank of Japan’s July meeting for more clues on the outlook for yield-curve control and the currency. 

Treasuries rose Friday, reversing some of the week’s losses after the jobs report, with 10-year yields falling from the highest level since November. 

There was something for every bull and bear in the jobs data: the 187,000 growth in payrolls was softer than estimated, wages topped forecasts and unemployment fell. 

“For investors, this ‘something for everyone’ report likely means that the trends in markets of late will continue,” said Seth Cohan, vice president and executive director of The Wealth Alliance. “Overall, the markets will likely be rangebound until we have a catalyst that helps to clarify economic conditions.”

Swap traders projected about a 40% chance of another quarter-point rate increase by the Federal Reserve by the end of this year. By the end of 2024, they projected rate cuts totaling more than 125 basis points.

Fed officials Raphael Bostic and Austan Goolsbee suggested that slower US employment gains mean the central bank may soon need to pivot to thinking about how long to hold rates at elevated levels. Their colleague Michelle Bowman said the Fed may need to raise rates further in order to fully restore price stability.

Key events this week:

  • Atlanta Fed President Raphael Bostic and Fed Governor Michelle Bowman at Fed Listens event, Monday
  • Bank of Japan issues Summary of Opinions for July monetary policy meeting, Monday
  • Japan household spending, Tuesday
  • US wholesale inventories, trade, Tuesday
  • Philadelphia Fed President Patrick Harker speaks, Tuesday
  • China CPI, PPI, Wednesday
  • India rate decision, Thursday
  • US initial jobless claims, CPI, Thursday
  • Atlanta Fed President Raphael Bostic pre-recorded remarks for employment webinar, Thursday
  • UK industrial production, GDP, Friday
  • US University of Michigan consumer sentiment, PPI, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.2% as of 7:09 a.m. Tokyo time. The S&P 500 fell 0.5% Friday
  • Nasdaq 100 futures rose 0.2%. The Nasdaq 100 fell 0.5%
  • Nikkei 225 futures fell 0.5%
  • Australia’s S&P/ASX 200 Index futures fell 0.2%
  • Hang Seng Index futures fell 0.3%

Currencies

  • The euro was little changed at $1.1011
  • The Japanese yen was little changed at 141.75 per dollar
  • The offshore yuan was little changed at 7.1899 per dollar
  • The Australian dollar was little changed at $0.6572

Cryptocurrencies

  • Bitcoin was little changed at $29,087.97
  • Ether was little changed at $1,829.22

Bonds

  • The yield on 10-year Treasuries declined 14 basis points to 4.03% Friday

Commodities

  • West Texas Intermediate crude rose 0.4% to $83.18 a barrel
  • Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Rita Nazareth.

More stories like this are available on bloomberg.com

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