As the US stock market struggled for direction, traders waited for a jobs report on Friday to find out what the Federal Reserve will do when it comes to its next policy steps.
Markets Wrapped After the Big Rally With VIX Now Below 20 Stocks Have No Stocks Churn After Big Rally With VIX Now Below 20 Stocks
In Japan, South Korea and Australia, the shares declined. The futures for Hong Kong indicated gains. Contracts for the S&P 500 fell after the index fell below during the US session. The gauge rallied on Fed Chair Jerome Powell's signals of a downshift in the pace of hikes earlier this week.
The Bloomberg Dollar Spot Index was steady after it fell to its lowest since June. The yen went up after a fourth straight day of advance.
Australian and New Zealand government bond yields fell after the lead from Treasuries on Thursday when their rally gathered steam amid a pullback in expectations for Fed tightening. The 10 year US benchmark hovered around 3.52% during Asian trading.
The bets on where the central bank rate will peak have dropped below 4.9%, according to swap markets. The current benchmark sits in a range between 3.75% and 4%.
Fed Bank of New York President John Williams said further hikes are needed to curb inflation. The central bank's Vice Chair for Supervision Michael Barr said officials had more to do in tightening monetary policy, though they could slow the pace of rate increases later this month.
The data showing American manufacturing contracted in November for the first time since May 2020 added to the concern that Fed hikes will raise the odds of a recession.
The remarkably resilient US jobs market is beginning to cool, but Friday s employment report may fall far short of the turning point that Fed officials are trying to beat back inflation. There are signs that labor demand is ebbing, but a bigger slowdown is needed to bring that demand in line with labor supply in order to contain wage growth.
The political turmoil in South Africa has sent the financial market into deeper rout with the rand coming off its worst one-day loss since May and yields on the 10 year sovereign bond rising most since 2015.
After four days of gains, oil fluctuated with China easing Covid restrictions and the US considering a pause in sales from its strategic reserves. Gold was steady.
Some of the big moves in markets as of 7: 38 a.m. Tokyo time:
The Japanese yen was little changed at 135.46 per dollar.
The story was produced with the help of Bloomberg Automation.