Asian Stocks Rise As Weak US Jobs Fuel Fed Bets: Markets Wrap

Asian equities climbed with Wall Street after weak US job openings data reinforced bets on a Federal Reserve interest-rate cut.

Shares in Japan, Australia and South Korea gained at the open. Equity-index futures for the S&P 500 and the Nasdaq 100 edged higher after both gauges advanced. Australian bonds tracked Wednesday’s moves in Treasuries, with yields on the 10-year declining almost five basis points to 4.37%. Oil dipped, while gold steadied.

With job openings falling to a 10-month low, traders are now almost fully pricing in a September Fed cut and projecting at least two reductions this year. The shift lifted equities, snapping a two-day losing streak for US stocks, and supported Treasuries a day before a pivotal US payrolls report.

The data is “another sign that the labour market is slowing down,” wrote Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “The dynamic boosts the case for rate cuts.”

Economists project about 75,000 jobs were added in August, based on the median of a Bloomberg survey, while the jobless rate is seen at 4.3%. Four straight months of sub-100,000 payrolls growth would mark the weakest such stretch since the onset of the pandemic in 2020.

“A large downside surprise in labor market data could push rates sharply lower given the concern around the Fed’s labor mandate,” said TD Securities strategists including Oscar Munoz and Gennadiy Goldberg. “We remain biased long on dips and expect rates to move lower throughout the year.”

Also, Federal Reserve Governor Christopher Waller said on CNBC that the central bank should begin lowering rates in September and make multiple cuts in coming months, adding that officials could debate the precise pace of reductions.

Investors will also focus on a bond auction in Japan Thursday, which faces added uncertainty from a global debt market turmoil and political instability at home.

Meanwhile, borrowers from across the globe are rushing into the bond market, with more than $128 billion of sales so far this week, and investors are lapping up the new debt.

Investors are being drawn to yields that are still elevated compared to long-term levels, while tight spreads signal continued confidence in companies’ credit strength.

In China, Beijing started imposing levies on additional US optical fiber imports on anti-dumping concerns. 

• Apple Inc. is planning to launch its own artificial intelligence-powered web search tool next year, stepping up competition with OpenAI and Perplexity AI Inc.

• Salesforce Inc. projected lackluster quarterly sales growth, suggesting its artificial intelligence product isn’t yet paying off as quickly as hoped in the face of competition from emerging AI companies.

• Hewlett Packard Enterprise Co. Chief Executive Officer Antonio Neri said the company expects to weather a slimming of profit margins as it enters a new era of artificial intelligence-driven demand.

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.2% as of 9:32 a.m. Tokyo time

• Hang Seng futures were little changed

• Nikkei 225 futures (OSE) rose 0.9%

• Japan’s Topix rose 0.6%

• Australia’s S&P/ASX 200 rose 0.8%

• Euro Stoxx 50 futures rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1658

• The Japanese yen was little changed at 148.08 per dollar

• The offshore yuan was unchanged at 7.1391 per dollar

• The Australian dollar was little changed at $0.6546

Cryptocurrencies

• Bitcoin fell 0.2% to $112,036.51

• Ether rose 0.1% to $4,473.41

Bonds

• The yield on 10-year Treasuries was little changed at 4.21%

• Japan’s 10-year yield declined two basis points to 1.620%

• Australia’s 10-year yield declined five basis points to 4.37%

Commodities

• West Texas Intermediate crude fell 0.5% to $63.68 a barrel

• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.