Hong Kong: Asian markets slid and the dollar held ground as the trading floor optimism earlier this week gave way to nervousness ahead of a massive U.S. employment report later Friday that could shape plans. for a Federal Reserve rate hike.
Weak economic data from Washington pushed equities higher earlier in the week and dragged the greenback on hope that the readings would allow the US central bank to rotate and slow its aggressive monetary tightening program.
However, the uncertainty that has characterized the year so far has slowly returned and the three major Wall Street indices ended Thursday with fresh losses, with a strong focus on non-farm wage (NFP) numbers.
Analysts expect the monthly report to show that 250,000 jobs were created in September, which would be the weakest since late 2020 but still a good number indicating a solid job market.
There is concern that a better-than-expected result could lead to another sell-off in risky markets as investors bet on further rate hikes.
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Federal Reserve officials have consistently warned that they are determined to raise borrowing costs to combat high inflation for four decades, even at the cost of a recession, fueling traders’ fears that the global economy is heading towards such a scenario.
“The Pivot Party gang dampened their newfound fervor overnight after aggressive central bankers voiced concerns about persistent inflation,” said Stephen Innes of SBI Asset Management.
He noted that other central banks, including Europe and Canada, have also taken more drastic measures.
However, Oanda’s Edward Moya added that next week’s CPI report will also be posted on traders’ radars.
“Economists are not expecting a significant reduction in price pressures, but many traders believe there could be a big report that will force the Fed to switch positions next week,” he said in a statement.
“The Fed’s message has been consistent and is likely to remain so even after the Nonfarm Payroll Report. The rise in interest rates and the lowering of bets are likely to have large swings after next Thursday’s inflation report. “
Asian markets extended New York’s drop, with negative earnings from chip makers – and a warning from South Korean Samsung – raising concerns about the next corporate earnings season.
Tokyo, Hong Kong, Sydney, Seoul, Wellington, Taipei, Manila and Jakarta are in negative territory.
Growing concern was US President Joe Biden’s warning that the world was facing nuclear “Armageddon” for the first time since the Cuban Missile Crisis of 1962 and was trying to find “off track” for the his Russian counterpart Vladimir Putin.
He told a Democratic Party fundraiser in New York that Putin was not “joking” when he threatened to use nuclear weapons as his military faced a series of defeats in eastern Ukraine following the February invasion.
The risk-off atmosphere saw the dollar rebound Thursday after days of losses as traders cut interest rate expectations and maintained progress in early Asian assets.
The lead was the British pound, which trapped below $ 1.12 and continued to slide to a record low last week before recovering on the Bank of England (BoE) lifeline.
However, observers have warned of greater volatility in the pound as the government moves forward with a debt-financed mini-budget to cut taxes, as promised BoE support will soon end.
Oil prices have fallen, but are heading towards their largest weekly increase since March after the Organization of the Petroleum Exporting Countries (OPEC) and other major Russian-led producers agreed to cut production by 2 million. barrels, prompting some analysts to expect a return to $ 100. barrel by the end of the year.
Key numbers around 0230 GMT
TOKYO – Nikkei 225: -0.6 percent to 27149.76 (break)
Hong Kong – Hang Seng Index: down 0.9 percent to 17,836.92
Shanghai – Boat: closed for holidays
Pound / Dollar: Up to $ 1.1164 from $ 1.1161 on Thursday
EUR / USD: It rose to $ 0.9797 from $ 0.9794
Euro / Pound: up to 87.77 pence from 87.74 pence
USD / JPY: Decreased to 145.04 yen from 145.11 yen
West Texas Intermediate: down 0.1% to $ 88.40 a barrel
North Sea Brent crude: down 0.2% to $ 94.28 a barrel
New York – Dow: down 1.2% to 29926.94 (close)
London – FTSE 100: -0.8 percent to 6997.27 (close). French news agency
