Investors also await headline United States (US) jobs data due on Thursday, albeit the report may do little more than confirm earlier private market surveys showing the labour market had slowed. Europe’s benchmark index of 600 big stocks rose 0.1% in subdued trading Monday morning, with Wall Street looking set to follow the steady mood as S&P 500 futures ticked 0.6% higher and Nasdaq 100 futures rose 1%. Expectations for a US interest rate cut in December have fallen to less than 50% following policymakers sounding hesitant. That has started to put pressure on stocks, especially in the frothy and rates-sensitive technology sector.
In Asia trade, Japan’s Nikkei dipped 0.2% with tourism and retail stocks down heavily after China cautioned citizens against visiting Japan. Shares in department store operator Isetan Mitsukoshi, Muji parent Ryohin Keikaku and cosmetics maker Shiseido notched declines of around 10%. In Australia, a 0.6% fall for after Britain’s high court found it liable for a dam collapse in Brazil held the bourse flat. Hong Kong and China indexes each fell by about 1%. Data showed Japan’s economy contracted for the first time in six quarters due to a hit from US tariffs. However, it was a Nikkei report on a $110 billion stimulus spending plan that weighed on bonds and sent 20-year yields to a 26-year high of 2.75%.
Some analysts see risks to the yen, too, if faith in fiscal discipline is shaken, much as it was in Britain last week when stocks, bonds and sterling tumbled on reports finance minister Rachel Reeves was backing away from tax hikes. Ten-year US Treasury yields were steady at 4.1347% and Germany’s 10-year , the benchmark for the euro zone, likewise held firm at 2.715% after touching its joint-highest since October 7 at 2.718%. Wall Street indexes had on Friday recovered from a steep selloff to notch a mixed close, with a small drop for the S&P 500 and modest gain for the Nasdaq. The headline US data release this week will be Thursday’s delayed September jobs report.
The figures may be too stale to be of much use, since private surveys have already flagged a labour market slowdown.
“If all it does is confirm that, it’s not going to change the tune of the more hawkish Fed officials. They are more worried about inflation upside risks, so Consumer Price Index data for them will be critical,” said ANZ’s Head of Research in Asia, Khoon Goh.
–Reuters–
