Asian stock markets fall ahead of US jobs update

October 7, 2022

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By JOE McDONALD – AP Business Writers

BEIJING (AP) — Asian stocks followed Wall Street’s decline on Friday ahead of U.S. jobs data as investors hope to persuade the Federal Reserve to ease plans for an interest rate hike.

Tokyo and Hong Kong, the region’s largest markets, fell. Chinese markets were closed for a holiday. Oil prices changed little.

Wall Street’s benchmark S&P 500 index fell 1% on Thursday after a private sector report said U.S. employers hired slightly more workers than expected in September. That gives ammunition to Fed officials who say more rate hikes are needed to cool the economy and rein in inflation that is at its highest level in four decades.

Investors were awaiting the release of US government data on Friday which is expected to show fewer people being hired compared to previous months. They hope this will help persuade the Fed that the five rate hikes this year are working and that it can scale back its plans for more.

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“What the market seems to be crying out for is a Fed pivot,” ING’s Robert Carnell said in a report. “For its part, the Fed is sticking to its ‘higher for longer’ mantra.”

The Nikkei 225 in Tokyo fell 0.6% to 27,149.75 and Hong Kong’s Hang Seng fell 1% to 17,823.29.

Seoul’s Kospi gained 0.2% to 2,241.87 while Sydney’s S&P ASX 200 lost 0.6% to 6,777.00.

New Zealand lost 0.2% while Singapore and Bangkok rose.

The Fed and central banks around the world are focused on extinguishing inflation that is at multi-decade highs, but investors fear their unusually high and rapid pace of rate hikes could tip the global economy into a tailspin. recession.

On Wall Street, the S&P 500 fell to 3,744.52. The index is up 4.4% for the week after its best two-day rally in 2½ years.

The Dow Jones Industrial Average fell 1.1% to 29,926.94. The Nasdaq composite slipped 0.7% to 11,073.31.

The yield on US government debt, or the difference between the market price and the payment at maturity, has widened. This indicates that traders expect more rate hikes.

The 10-year Treasury yield, which helps set mortgage rates, rose to 3.81% from 3.75% on Wednesday night. The two-year Treasury yield rose to 4.22% from 4.14% on Monday evening.

Strong U.S. hiring is positive for job seekers, but a sign of lasting economic strength, which could lead the Fed to believe more rate hikes are needed.

US government data showed the number of jobless claims hit a four-month high last week. This suggests that the labor market may be cooling.

Forecasters expect the government to report that the economy added 250,000 jobs last month, well below last year’s monthly average of 487,000, but still a strong figure despite inflation and two consecutive quarters of contraction in the US economy.

In energy markets, benchmark U.S. crude rose 2 cents to $88.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract advanced 69 cents on Thursday to $88.45. Brent crude, the price basis for international oil trade, fell 4 cents to $94.38 a barrel in London. It rose $1.05 the previous session to $94.42.

The dollar fell to 144.92 yen from 145.07 yen on Thursday. The euro gained 98.11 cents against 97.94 cents.

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