(Bloomberg) — Asian markets looked set for a cautious start as investors braced for a barrage of US economic data amid lingering uncertainty over the Federal Reserve’s policy path. Bitcoin erased its gains for the year.
Equity-index futures pointed to modest declines in Hong Kong and a slight gain for Japan, while Australian shares opened lower. The yen held steady ahead of third-quarter growth data. US shares closed little changed on Friday as investors stayed on the sidelines ahead of economic reports delayed by the government shutdown.
After weeks of limited data, investors will finally get fresh signals on the health of the US economy as agencies begin releasing key indicators, including the September employment figures on Thursday. Traders are also navigating a mix of risks — from stretched valuations in AI-related stocks to renewed strains in relations between China and Japan. Risk appetite seemed to be fading, with Bitcoin sliding below $94,000 and wiping out its year-to-date advance.
“November so far has seen a pretty wobbly ride for shares,” Shane Oliver, chief economist and head of investment strategy at AMP Ltd., wrote in a note to clients. “Share markets remain at risk of a correction given stretched valuations, risks around US tariffs and the softening US jobs market.”
A slew of Fed officials have expressed skepticism over the need for a cut in December, or outright opposed one, less than a month after Chair Jerome Powell warned that a December cut is far from a “foregone conclusion.”
Last week, futures traders pushed the odds of a quarter-point rate cut in December below 50% as some Fed officials indicated that such a move is far from a sure thing. That near-term uncertainty has driven up a gauge of expected bond-market volatility, which had been hovering around a four-year low.
“While there will be questions about data quality, market participants will react to new information” and weigh the dollar, Commonwealth Bank of Australia strategists led by Joseph Capurso wrote in a note to clients. “We expect the non-farm payrolls report for September to underperform expectations of a 50,000 increase.”
Meanwhile, the yen was steady in early trading ahead of Japanese third quarter growth data, which may provide justification for Prime Minister Sanae Takaichi compiling a hefty stimulus package. Japan’s real gross domestic product is forecast to contract by 2.4% in the three months through September on an annualized basis, the first decline in six quarters, according to economists’ estimates.
The potential for stimulus and a reduction in rate hike expectations following Takaichi’s appointment has placed fresh pressure on the yen. The currency slid to its weakest in nine months last week, leading to official warnings that moves have become one-sided. Any further weakening may increase angst over possible government intervention with the currency near levels that previously drew authorities into the market.
“Technically, USD/JPY is approaching levels where Japanese currency officials are expected to begin to verbally intervene more aggressively,” Tony Sycamore, a strategist at IG Markets, wrote in a note. “However, actual physical intervention is unlikely until the exchange rate reaches around 160 or higher, given the dovish stance of the new Japanese Prime Minister.”
In commodities, oil started the week a touch lower while gold edged up. The precious metal has jumped more than 50% this year, putting it on course for its best annual gain since 1979.
Attention is also on the cryptocurrencies market. Just a little more than a month after reaching an all-time high, Bitcoin has erased the more than 30% gain registered since the start of the year as the exuberance over the pro-crypto stance of the Trump administration fades.
The dominant cryptocurrency fell below $93,714 on Sunday, pushing the price beneath the closing level reached at the end of last year, when financial markets were rallying following President Donald Trump’s election victory. Bitcoin soared to a record $126,251 on Oct. 6, only to begin tumbling four days later after unexpected comments on tariffs by Trump sent markets into a tailspin worldwide.
Corporate News:
Samsung Group and SK Group were among four of South Korea’s biggest companies that pledged to invest about $550 billion in the country after meeting with President Lee Jae Myung. A White House national security memo claimed Alibaba Group Holding Ltd. provided the Chinese military with technology support against targets in the US, the Financial Times reported. Boeing Co. said it will ensure its factories are ready to absorb a higher rate of aircraft output before lifting the tempo again next year. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% as of 8:26 a.m. Tokyo time Hang Seng futures fell 0.3% Australia’s S&P/ASX 200 fell 0.2% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1622 The Japanese yen was little changed at 154.54 per dollar The offshore yuan was little changed at 7.0978 per dollar The Australian dollar was little changed at $0.6534 Cryptocurrencies
Bitcoin rose 0.9% to $94,271.23 Ether rose 0.7% to $3,094.2 Bonds
Australia’s 10-year yield advanced three basis points to 4.47% Commodities
West Texas Intermediate crude fell 1% to $59.48 a barrel Spot gold rose 0.5% to $4,106.23 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Masaki Kondo.
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