Asian markets retreated on Tuesday as investors prepared for the upcoming US jobs report and watched developments in China, where fresh data renewed concerns about the economy.
The Federal Reserve is expected to cut interest rates in its next meeting this month, but attention is focused on Friday’s non-farm payrolls (NFP) figures, which could influence the magnitude of the cut. Analysts suggest that a reading significantly above or below forecasts could impact expectations for rate adjustments, with a robust NFP likely supporting a 25-basis-point cut and a weak NFP potentially leading to a 50-basis-point cut.
Charu Chanana of Saxo Capital Markets highlighted that this week’s labor data, including job openings and private hiring figures, will be crucial in determining the Fed’s decision. Investors are also keenly awaiting comments from New York Fed officials, including John Williams and Christopher Waller, for further insights.
With Wall Street closed on Monday for a public holiday, Asian markets saw declines:
- Hong Kong: Hang Seng Index down 0.2% at 17,651.49
- Shanghai: Composite down 0.3% at 2,802.98
- Seoul, Sydney, Wellington, Taipei, Manila, Mumbai, Jakarta: All fell, though Tokyo remained flat
- Singapore and Bangkok: Recorded small gains
Nervousness over the Chinese economy persisted, with recent data showing the manufacturing sector contracting for the fourth consecutive month. Despite the economic weaknesses highlighted by various indicators, Beijing has yet to implement substantial stimulus measures, leaving investors anxiously awaiting upcoming inflation and trade data.
In currency markets:
- Euro/dollar: Down at $1.1062
- Pound/dollar: Down at $1.3129
- Dollar/yen: Down at 146.02 yen
In commodities:
- West Texas Intermediate (WTI): Up 0.5% at $73.90 per barrel
- Brent North Sea Crude: Down 0.4% at $77.19 per barrel
In company news, Hong Kong-listed Cathay Pacific’s shares slipped after it announced a temporary grounding of its A350 aircraft for inspections due to an engine component failure. The airline has canceled 24 return flights up until the end of Tuesday as it inspects its fleet of 48 Airbus A350 planes.
