(Bloomberg) — Asian shares inched higher in the leadup to US jobs data, after US stocks hit another record following Donald Trump’s announcement of a trade deal with Vietnam.
A regional equity gauge opened up 0.2% after the S&P 500 closed at another record high Wednesday. News of a trade deal supported apparel stocks including Nike Inc. amid hopes the latest accord will avert a potential supply-chain catastrophe. The dollar held its losses, hovering around three-year lows.
Treasuries edged up modestly in early Asian trading Thursday after yields rose in the prior session following heavy selling in the UK, where concerns about Chancellor of the Exchequer Rachel Reeves’ future reignited questions over the nation’s fiscal position. In Japan, 10-year bonds declined ahead of a closely watched auction of 30-year sovereign notes at 12:35 p.m. in Tokyo.
The cross-asset moves underscored cautious optimism as traders contend with pockets of uncertainty ahead of jobs data that will help identify the path ahead for interest rates. Like in the UK, investors have raised concerns in the US, where Trump’s signature economic legislation stalled in the House Wednesday afternoon as Republican fiscal conservatives delayed a key procedural vote.
On the Vietnam trade deal, Trump said he reached a deal with the country after weeks of negotiations. A 20% tariff will be placed on Vietnamese exports to the US, with a 40% levy on any goods deemed to be transshipped through the country. Trump said that Vietnam had agreed to drop all levies on US imports.
Markets Live Strategist Mary Nicola says:
The deal also includes a 40% duty on transshipped goods, a clause clearly aimed at Chinese exports. Details on enforcement remain scarce, but this heightens risks of a potential response from Beijing.
Meanwhile, UK Prime Minister Keir Starmer said Rachel Reeves will stay on as Chancellor of the Exchequer, as he sought to draw a line under speculation about her future that sparked the bond selloff.
Back in the US, monthly nonfarm payroll data due later Thursday — a day earlier than usual due to a holiday — will show slower hiring and the highest unemployment rate since 2021 as the Trump administration’s trade and immigration policy shifts start to leave an imprint.
Separate private payrolls data from ADP Research on Wednesday showed employment at US companies fell for the first time in over two years. Despite signs of a downshift, Federal Reserve Chair Jerome Powell has repeated the labor market remains solid. Policymakers have refrained from lowering interest rates this year as they wait to see the impact of tariffs on inflation.
“One of the reasons the Fed has been able to be patient before cutting rates was because the job market was holding up so well, so if that were to change, then the Fed may be forced to move earlier than they would like,” said Chris Zaccarelli at Northlight Asset Management.
Following ADP Research’s private payrolls data, traders added to wagers on at least two rate reductions this year, with the first coming in September. If the upcoming jobs report shows further weakness, traders reckon the Fed could move up cuts.
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 9:18 a.m. Tokyo time
- Japan’s Topix fell 0.3%
- Australia’s S&P/ASX 200 was little changed
- Euro Stoxx 50 futures rose 0.6%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1806
- The Japanese yen rose 0.1% to 143.49 per dollar
- The offshore yuan was little changed at 7.1607 per dollar
Cryptocurrencies
- Bitcoin fell 0.2% to $108,958.4
- Ether fell 0.7% to $2,573.04
Bonds
- The yield on 10-year Treasuries declined one basis point to 4.27%
- Australia’s 10-year yield advanced four basis points to 4.19%
Commodities
- West Texas Intermediate crude fell 0.3% to $67.24 a barrel
- Spot gold fell 0.3% to $3,346.68 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson.
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