(Dec 17): Asian shares tracked Wall Street in posting modest moves on Wednesday after sluggish US jobs data did little to boost bets on further interest-rate cuts from the US Federal Reserve (Fed).
MSCI’s regional equities gauge swung between small gains and losses after US benchmarks had marginal moves on Tuesday. Tesla Inc shares declined about 1% in extended trading after the company’s sales in California were poised to be suspended for 30 days. China saw another spectacular debut by a chipmaker on Wednesday with MetaX Integrated Circuits Shanghai Co jumping as much as 569% on debut.
Crude oil rose after US President Donald Trump ordered a blockade of carriers going into and leaving Venezuela, raising concerns about supply from the Opec member. In commodities beyond oil, silver climbed to a record above US$65 ($83.96) an ounce, while platinum rose for a fifth day to hit the highest since 2011.
The latest US labour data signalled a cooling jobs market — but not one rapidly weakening — prompting traders to hold off on increasing bets for near-term rate cuts. After Tuesday’s report, markets priced in roughly a 20% chance of a January reduction. Attention will now turn to Thursday’s inflation numbers for clues on whether the narrative may shift in the final full trading week of the year.
“We take a glass half full, rather than a glass half empty, view of the combined part-October, full November employment report and, more importantly, we think the Fed will too,” Evercore ISI economist Krishna Guha wrote in a note. “Specifically, we do not think this was weak enough to spur another near-term rate cut.”
Non-farm payrolls increased 64,000 in November after declining 105,000 in October amid a contraction in federal employment. The unemployment rate was 4.6% last month, up from 4.4% in September and the highest since 2021.
See also: GoTo’s rebound hinges on shareholder vote as Grab merger eyed
The US central bank is seen as less likely to put much weight on the data due to disruptions caused by the US government shutdown.
“While the labour market reports were soft, the data need to be treated with caution following the government shutdown,” said ANZ Group Holdings Ltd analysts Brian Martin and Daniel Hynes. “Uncertainty surrounding the timing of the Federal Open Market Committee’s next move is unlikely to be resolved until the data flow normalises next year.”
A separate report out Tuesday showed retail sales were little changed in October as a decline at auto dealers and weaker gasoline receipts offset stronger spending in other categories. And figures from S&P Global showed US business activity expanded in December at the slowest pace in six months, while a measure of input prices jumped to a more than three-year high.
See also: Asian stocks dip in run-up to US jobs data; yen gains
In other corners of the market, the dollar traded in narrow ranges versus major peers, with markets still fully pricing in two quarter-point rate cuts by the Fed next year.
“We think the dollar is challenged,” said Richard Franulovich, the head of foreign exchange strategist at Westpac Banking Corp. “The labour market is not absolutely breaking apart and showing a painful recessionary adjustment, but it remains fragile.”
Meanwhile, the Trump administration has also threatened retaliation against the European Union in response to efforts to tax American tech companies, singling out prominent companies, including Accenture plc, Siemens AG and Spotify Technology SA, as possible targets for new restrictions or fees.
Trump also ramped up pressure on Venezuela, sending crude oil higher after the commodity hit its lowest level since 2021.
Trump’s move represents an escalation and follows the seizure of an oil tanker last week by US forces off Venezuela. Trump said he is also designating the regime of President Nicolas Maduro a foreign terrorist organisation.
Corporate highlights:
- Warner Bros Discovery Inc is planning to reject Paramount Skydance Corp’s hostile takeover bid due to concerns about financing and other terms, people familiar with the matter said.
- China Vanke Co unveiled a revised bond-extension proposal for creditors to vote on, as the distressed developer makes another attempt to gain support for a plan to avert default.
- China’s Luckin Coffee Inc is considering making a bid for Nestle SA’s Blue Bottle Coffee to boost its brand profile and expand in the premium coffee segment.
- SBI Shinsei Bank Ltd surged as much as 11% in its trading debut in Tokyo on Wednesday after raising JPY322 billion ($2.68 billion) in Japan’s second-biggest initial public offering of the year.
- Treasury Wine Estates Ltd’s stock sank after the company announced an overhaul including asset sales and cost cuts, as the Penfolds producer tackles weakening demand in its key markets.
- Waymo, Alphabet Inc’s autonomous driving unit, is in discussions to raise more than US$15 billion at a valuation near US$100 billion, in a financing round led by its parent company.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 10.49am Tokyo time on Wednesday
- Japan’s Topix was little changed
- Australia’s S&P/ASX 200 fell 0.2%
- Hong Kong’s Hang Seng was little changed
- The Shanghai Composite rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was unchanged at US$1.1747
- The Japanese yen was little changed at 154.65 per dollar
- The offshore yuan was little changed at 7.0369 per dollar
- The Australian dollar was little changed at US$0.6631
Cryptocurrencies
- Bitcoin fell 0.1% to US$87,617.74
- Ether rose 0.2% to US$2,957.19
Bonds
- The yield on 10-year Treasuries was little changed at 4.15%
- Japan’s 10-year yield was little changed at 1.960%
- Australia’s 10-year yield advanced one basis point to 4.74%
Commodities
- West Texas Intermediate crude rose 0.9% to US$55.78 a barrel
- Spot gold rose 0.5% to US$4,323.96 an ounce
Uploaded by Tham Yek Lee
