Mumbai, 6 Sep (Commoditiescontrol): Asian shares remained in tight ranges on Friday as investors anxiously awaited U.S. jobs data that could influence future rate cuts in the world's largest economy. Oil prices, facing their worst week in over a year, hovered near critical levels, with their near-term direction dependent on the upcoming payrolls report.
The MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.2%, though it has fallen 2.3% this week. Japan's Nikkei slipped 0.1%, recording a 3.9% decline for the week. China's stock markets opened mixed, and Hong Kong's Hang Seng remained flat.
U.S. futures were hit by the nervous sentiment, with Nasdaq futures down 0.6% and S&P futures slipping 0.3%. Meanwhile, the Japanese yen, which saw a 2% rally this week, edged up 0.1% to 143.27 per dollar but remains vulnerable to a pullback.
Investors are keenly focused on the U.S. non-farm payrolls report, following Federal Reserve Chair Jerome Powell's remarks about the importance of labor market strength. Analysts anticipate a 165,000 rise in new jobs and a slight dip in the unemployment rate to 4.2%. However, recent weaker job openings and private sector gains have raised expectations for a possible half-point rate cut by the Fed, with markets pricing in a 42% chance.
The market’s reaction will be closely watched, especially with influential Fed officials Christopher Waller and John Williams scheduled to speak after the jobs data release. Analysts at ING suggest that even if the payrolls meet expectations, the likelihood of a 50 basis point cut could still be dialed back.
Bonds saw gains earlier this week, but those could reverse depending on the jobs data. The two-year Treasury yield has dropped 17 basis points to 3.752%, its lowest since early 2023, while the 10-year yield fell 18 basis points to 3.733%, with the yield spread nearing positive territory.
Oil markets, grappling with demand concerns, are facing their worst week since October 2023, despite a significant withdrawal from U.S. inventories and delayed output increases by OPEC+ producers. Brent crude futures edged up 0.2% to $72.8 a barrel but have declined 7.6% this week, hovering near a crucial $70-$71 range that could lead to lows not seen since late 2021.
In other markets, gold remained steady at $2,514 an ounce, just below its record high.
In corporate news, Japanese retail giant Seven & i Holdings rejected a $38.5 billion cash bid from Canada's Alimentation Couche-Tard, stating the offer was not in the best interest of shareholders.
(By Commoditiescontrol Bureau: 09820130172)
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