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Asian markets kicked off November on a tentative note as investors tread cautiously, with shares mostly lower and Treasury yields near three-month highs.
Market participants await Friday’s U.S. nonfarm payrolls report, a pivotal indicator ahead of the U.S. presidential election on Tuesday and the Federal Reserve’s anticipated rate cut on Wednesday.
In commodity markets, oil extended its rally, with Brent crude prices jumping nearly 2% to $74.13 a barrel. Reports of potential retaliatory action by Iran against Israel from Iraqi territory are adding to global energy concerns.
Meanwhile, gold prices steadied at $2,745.69 per ounce after a sharp 1.5% drop overnight.
In Asia, MSCI’s Asia-Pacific shares index slipped 0.3%, down 1.9% for the week, with Japan’s Nikkei losing 2.1% as a stronger yen weighed on Japanese exporters.
Picture: HK50 recovers modestly, testing resistance near 20,600 as bullish momentum builds, seen on the VT Markets app.
The HK50, or Hong Kong Hang Seng Index, is showing a modest recovery after a recent low near 20,192, with the current price stabilizing around 20,513.
The index has been trending upward in the short term, supported by the 5-, 10-, and 30-period moving averages. The shorter-term moving averages have crossed above the longer 30-period MA, indicating a potential shift in momentum.
This movement reflects some buying interest following previous declines, with recent sessions witnessing a build-up in upward pressure.
China’s blue-chip stocks rose 0.1% and Hong Kong’s Hang Seng gained 0.4% after data indicated growth in Chinese factory activity.
Nasdaq futures managed a modest 0.3% rise after Amazon’s better-than-expected quarterly earnings boosted the company’s market cap by $104 billion.
However, tech giants Meta and Microsoft saw declines of 4% and 6%, respectively, as concerns about rising costs in the artificial intelligence space dampened enthusiasm despite earnings beats.
Expectations for a Fed rate cut are high, with a 94% chance of a quarter-point reduction priced in, based on the CME FedWatch tool.
The upcoming U.S. nonfarm payrolls report, expected to show an addition of 113,000 jobs in October, could impact this outlook.
Analysts remain cautious, with some predicting job growth as low as 70,000 due to factors like recent hurricanes and the Boeing strike.
Treasury yields remained elevated, with two-year yields up 7 basis points to 4.1702% this week and 10-year yields holding around 4.2840%, highlighting market anticipation for the Fed’s decision.
In foreign exchange, the pound hovered near a 2.5-month low at $1.2891, pressured by expectations that the UK government’s budget could fuel inflation, prompting the Bank of England to hold back on rate cuts.
U.S. dollar strength remains a key factor across markets as traders await U.S. economic data to guide rate expectations.
See also: Dollar Steady, Eyes on Jobs and Elections
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