(Bloomberg) — Asian equities fell following a lackluster session on Wall Street that weighed on tech stocks and bonds, with investors keenly awaiting the release of key US inflation data later on Friday.
MSCI Inc.’s gauge of Asian shares fell as much as 0.7%, but was still on track for a second straight weekly gain. Japanese indexes led losses in the region after a strong rally in the previous session. US futures edged slightly higher after the S&P 500 climbed 0.1% on Thursday. The yield on 10-year Treasuries steadied after rising three basis points in the previous session.
Federal Reserve officials will get a dated reading on their preferred inflation gauge, the personal consumption expenditures price index, on Friday. The September income and spending report — also delayed because of a government shutdown — is due to be released as well.
The moves in markets underscore how risk sentiment remains fragile even as global stocks have rebounded in the past two weeks to be within 1% of a record closing high reached in late October. Those gains partly reflected easing concerns over tech valuations and confidence among traders that the Fed will deliver a 25-basis point interest-rate cut next week in its last meeting of the year.
“Participants are consciously reducing risk exposure before a key data window,” said Dilin Wu, a strategist at Pepperstone Group. “Even with high odds, PCE still has the power to shift the market’s timing and confidence in the path of rate cuts.”
Friday’s figures will include the PCE index and a core measure that excludes food and energy. Economists project a third-straight 0.2% increase in the core index. That would keep the year-over-year figure hovering a little below 3%, a sign that inflationary pressures are stable, yet sticky.
In Asia, focus today will be on an interest-rate decision in India, where policymakers are having to weigh record low inflation against a plunging currency and 8%-plus economic growth. A majority of the 44 economists surveyed by Bloomberg expect the central bank to cut its benchmark repurchase rate by a quarter point to 5.25%.
Meanwhile, shares of Moore Threads Technology Co., a Chinese artificial intelligence chipmaker, surged more than 450% in its Shanghai trading debut after raising 8 billion yuan ($1.1 billion) in the year’s second-largest onshore initial public offering.
US Treasuries
A measure of the dollar edged lower in Asia on Friday and was on course for its fourth weekly decline in five. Elsewhere, Bitcoin traded below $93,000 while silver extended its retreat from an all-time high seen earlier in the week. Gold also fell.
US government bonds were sold off on Thursday as data showed signs of resilience in the jobs market. Applications for US unemployment benefits fell last week to the lowest in more than three years, indicating that employers are still largely holding onto workers despite a wave of recent layoffs.
Separate data from Challenger, Gray & Christmas showed announced layoffs at US companies fell last month after surging in October, but were still the highest for any November in three years. Even so, bets on a Fed reduction remained intact.
“There remain some negative payroll employment readings. But the US labor market is not collapsing based on timely data and reports that have leading indicator properties,” said Don Rissmiller at Strategas. “We continue to believe the Fed will cut the fed funds rate again by 25 basis points in December.”
Policymakers will not yet have the government’s November jobs report in hand for their meeting next week. The report, originally due Dec. 5, was delayed until Dec. 16 as a result of the record-long government shutdown. That release will also include October payrolls figures.
“We continue to expect two rate cuts by the end of the first quarter of 2026, with Friday’s personal consumption expenditure index likely to show price pressures under control,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.
Corporate News
Meta Platforms Inc. shares jumped 3.4% after people familiar with the matter said executives are considering budget cuts for the metaverse group. Australian data center group NextDC Ltd. and ChatGPT-developer OpenAI agreed to partner on the development of a large-scale data center in Sydney. NextDC’s shares jumped. The cloud-computing startup Fluidstack is in talks to raise roughly $700 million in a funding round that would value the company at $7 billion, according to a person familiar with the situation. Mitsubishi UFJ Financial Group Inc. plans to team up with Morgan Stanley in asset management, deepening their 17-year partnership. Jane Street Group’s record haul this year has been boosted by savvy bets on the artificial intelligence boom that are showing up as big gains in its trading results, according to people familiar with the matter. China’s crackdown on borrowing by local governments is forcing state-run entities in even some of the wealthiest provinces to tap costly credit from non-bank lenders, a stopgap that’s building up risks in an opaque corner of the financial system. Nvidia Corp. would be barred from shipping advanced artificial intelligence chips to China under bipartisan legislation unveiled Thursday in a bid to codify existing US restrictions on exports of advanced semiconductors to the Chinese market. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% as of 11:14 a.m. Tokyo time Japan’s Topix fell 1.3% Australia’s S&P/ASX 200 was little changed Hong Kong’s Hang Seng fell 0.5% The Shanghai Composite fell 0.1% Euro Stoxx 50 futures were little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1652 The Japanese yen was little changed at 155.05 per dollar The offshore yuan was little changed at 7.0669 per dollar Cryptocurrencies
Bitcoin rose 0.2% to $92,387.29 Ether rose 1.2% to $3,161.63 Bonds
The yield on 10-year Treasuries was little changed at 4.09% Australia’s 10-year yield declined three basis points to 4.67% Commodities
West Texas Intermediate crude fell 0.2% to $59.53 a barrel Spot gold fell 0.1% to $4,202.68 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson and Winnie Hsu.
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