Asian Stocks to Echo US Drop Ahead of Jobs Data: Markets Wrap

(Bloomberg) — Asian equities were primed for declines Friday after US stocks fell for the first time in five sessions ahead of jobs data that will help determine whether the Federal Reserve will cut interest rates in December.

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Equity futures for Japan, Australia and Hong Kong all fell, taking cues from the downbeat mood on Wall Street. The S&P 500 dropped 0.2% and the tech-heavy Nasdaq 100 declined 0.3%.

Treasuries held to muted moves on Thursday with front-end yields rising and those at the long-end falling. Swap trading showed the implied odds of a quarter-point Fed cut this month is around 65%. The dollar slipped against other major currencies with the yen and euro strengthening. Australian and New Zealand bond yields climbed early Friday.

The moves signal caution ahead of Friday’s nonfarm payrolls data after bouts of political turmoil in Asia and Europe have triggered a wave of volatility across currency markets but failed to jolt stocks. US jobless claims rose to a one-month high on Thursday, while economists estimate payrolls rose by 220,000 in November, rebounding after two hurricanes and a strike lowered October numbers.

“We’ll get a fuller picture,” after Friday’s jobs data, said Chris Larkin at E*Trade from Morgan Stanley. “But for now, the story continues to be a labor market that occasionally appears to bend, but avoids breaking.”

In Europe, a measure of France’s bond risk fell amid hopes lawmakers will strike a deal on next year’s budget sooner than many investors had expected. French President Emmanuel Macron said he will serve out the remainder of his presidential term as he seeks to quickly stymie the political turmoil.

Elsewhere, South Korea is planning measures to boost after-hours liquidity in the won, after this week’s political crisis triggered a surge in volatility in the currency.

In commodities, oil inched lower in a choppy session after OPEC+ deferred supply increases for three months, but still plans to add barrels next year to a market that’s expected to be oversupplied. Meanwhile, Chevron Corp. said it plans to slow production growth in the biggest US oil field next year. Gold also fell.

Bitcoin pared a rally that earlier drove digital asset past $100,000 buoyed by President-elect Donald Trump’s pick of a crypto proponent to be the next head of the US securities regulator.

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