(Bloomberg) – Asian stocks fell as the surprise strong US jobs report raised the possibility that the US Federal Reserve will raise interest rates more, while worries about US geopolitical tensions- China also weighed on market sentiment.
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The dollar rose for a third day after its gauge of strength rose more than 1% on Friday, as data showed a spike in payrolls and unemployment at a 53-year low. This points to persistent US inflation and strengthens the case for more rate hikes. Korean stocks and contracts for US stocks also fell.
Shares fell in Hong Kong and mainland China, with the Hang Seng Index closing at a one-month low of course. U.S.-listed Chinese stocks slipped on Friday after the Biden administration decided to postpone Secretary of State Antony Blinken’s upcoming trip to China due to a hot air balloon accused of being a Chinese spy. that was shot down.
Willer Chen, senior research analyst at Forsyth Barr Asia, said: “The event will come as a big surprise to investors given previous market expectations that Sino-US relations could improve. after the visit to Blinken has now been postponed.”
In Japan, stocks climbed and the yen weakened after Nikkei reported that the government had approached Bank of Japan Deputy Governor Masayoshi Amamiya about succeeding Haruhiko Kuroda as head of the central bank. While the Japanese government denied the report, investors said it was more likely that the current ultra-easy monetary policy would last long if one of its architects succeeds Kuroda.
“The chances of a policy rejection now are slim,” said Toru Suehiro, chief economist at Daiwa Securities. “While the removal of yield curve control is possible once bond market stability is confirmed, an obvious rate hike like the end of negative rates looks unlikely. go out.”
U.S. stocks halted a three-day rally on Friday in a volatile session as stocks swung between modest gains and losses as investors sparred with labor data.
The S&P 500 is still posting weekly gains that took the index to its highest level since August. The Nasdaq 100 also posted weekly gains, despite being heavily sold behind Apple Inc., Alphabet Inc. and Amazon. com Inc. reported disappointing results on Thursday.
“Friday’s data has serious implications for Fed policy. Simply put, it affirms our long-held belief that the Fed will have to hike prices higher for a longer period of time than optimistic market scenarios have priced in,” said Win Thin, chief financial officer. global currency strategy at Brown Brothers Harriman, wrote in a note. “We still have ways to get to the top of the Fed Funds rate, but people are still looking for second half rate cuts in an extremely rapid turnaround.”
Treasury yields rose for a second day, while Australian bonds slid.
The Turkish lira was little changed against the dollar at the start of the session. Turkey and neighboring Syria were hit by a strong earthquake before dawn on Monday, killing more than 110 people.
Elsewhere, oil prices steadied as traders grasped the outlook for demand in China and the latest sanctions on Russian energy flows took effect. Yellow rose.
Adani Group assets are set to continue to be volatile this week. All 10 stocks of the group fell at the open in India, deepening their sell-off. Flagship Adani Enterprises Ltd. decided to shelve plans to sell the bonds for the first time to the public, according to people familiar with the matter. While Friday’s drop in shares was less severe than in previous days, the stock drop has nearly halved the market value of companies in the Indian group since Hindenburg Research. claims manipulation and accounting fraud.
Belita Ong, president of Dalton Investments, said on Bloomberg TV: “Obviously it’s very important for the country because active businesses are very popular. “Our belief is that the government will take whatever steps are necessary to stabilize the situation, ensure the operating units are functioning.”
This week’s main events:
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Earnings reports this week are expected to include: AP Moller-Maersk, Apollo Global Management, AstraZeneca, BNP Paribas, BP, CME Group, Duke Energy, KKR, Nintendo, PepsiCo, Semiconductor Manufacturing International, Siemens, SoftBank Group , Toyota Motor, Uber Technologies , Unilever, Walt Disney
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Eurozone Retail Sales, Monday
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Australia Rate Decision, Tuesday
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US Trade, Tuesday
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Fed Chairman Jerome Powell at the Economic Club of Washington, Tuesday
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US President Joe Biden delivers his State of the Union address, Tuesday
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India’s interest rate decision, Wednesday
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U.S. Wholesale Inventories, Wednesday
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John Williams of the New York Fed at the event in New York
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Sweden Rate Decision, Thursday
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US Initial Jobless Claims, Thursday
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ECB President Christine Lagarde participates in EU leaders summit, Thursday
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Governor of the Bank of England Andrew Bailey appears before the Finance Committee, Thursday
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PPI, CPI, BoP, China Friday
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American University of Michigan Consumer Sentiment, Friday
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Fed’s Christopher Waller and Patrick Harker speak on Friday
Some key moves in the market:
share
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S&P 500 futures were down 0.4% at 2 p.m. Tokyo time. S&P 500 down 1%
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Nasdaq 100 futures fell 0.5%. Nasdaq 100 drops 1.8%
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Japan’s Topix index rose 0.5%
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South Korea’s Kospi fell 1.2%
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Hong Kong’s Hang Seng Index drops 2.4%
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China’s Shanghai Composite Index drops 1%
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India’s Nifty 50 Index drops 0.8%
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Australia’s S&P/ASX 200 Index drops 0.2%
currency
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The Bloomberg Dollar Spot Index is up 0.1%.
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The euro was unchanged at $1.0795
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Japanese yen fell 0.4% to 131.65 to the dollar
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Offshore yuan rose 0.3% to 6.7889 per dollar
electronic money
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Bitcoin drops 0.1% to $22,878.93
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Ether up 0.2% to $1,624.9
bonds
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Yields on 10-year Treasuries rose two basis points to 3.54%
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Japan’s 10-year yield steady at 0.49%
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Australia’s 10-year yield rose 8 basis points to 3.46%
Goods
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West Texas Intermediate crude rose 0.1% to $73.47 a barrel
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Spot gold rose 0.7% to $1,878.43 an ounce
This story was made possible with support from Bloomberg Automation.
–With support from Richard Henderson, Charlotte Yang and Michael G. Wilson.
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