Asian shares hold near record high ahead of US jobs data, gold rises
Asian shares hovered around their record highs ahead of the US jobs data on Wednesday post weak retail sales reinforcing bets that the US Fed would cut rates later this year.
The MSCI Asia Pacific Index was flat after gaining for two days that took the gauge to a record high. The moves follow Wall Street benchmarks retreating on Tuesday.
Treasury futures held their gains early Wednesday after 10-year bond yields dropped to the lowest in about a month in the US session. There will be no cash trading in Treasuries during the Asian day as Japan is closed for a holiday. Gold, which typically benefits when rates are cut, edged up as money markets see slightly higher odds of three Fed cuts this year — with two already fully priced in.
Unexpectedly weak December retail sales hinted at softer consumer support for the US economy as the year ended. The data set the stage for a pivotal week, with traders bracing for the US jobs report on Wednesday and inflation figures on Friday for clues on the path for rates, even as equities waver amid concerns over technology firms’ hefty spending on artificial intelligence.
Economists predict a 65,000 rise in January payrolls. Such an outcome would be the best in four months. The unemployment rate is seen holding at 4.4%. There will be an annual revision to the jobs count — which is expected to reveal a markdown in the year through March 2025.
On Tuesday, the S&P 500 slipped 0.3% amid weakness in several tech names, though the gauge remained near the record reached last month. The dollar wavered, while the yen led gains among Group-of-10 currencies versus the greenback. Bitcoin dropped below $70,000.
Meanwhile, Fed Bank of Cleveland President Beth Hammack said rates could be on an extended hold while officials evaluate incoming economic data. Her Dallas counterpart Lorie Logan said she’s hopeful inflation will continue to come down, though it would take “material” weakness in the labor market for her to support more rate cuts.
With inputs from Bloomberg
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