Asian stocks opened higher on Thursday, following gains in US markets. Positive sentiment stemmed from weak US jobs data, bolstering confidence that the Federal Reserve could cut interest rates at its meeting next week. The MSCI Asia stock index rose around 0.2%, while US stock index futures held steady after the S&P 500 rose 0.3% and the Nasdaq 100 gained 0.2% on Wednesday.
In global financial markets, the US dollar index remained flat after previously falling 0.4%. US Treasury yields also fell, with the two-year yield hovering around 3.48% as expectations for an interest rate cut increased. Meanwhile, Bitcoin corrected and hovered near the $93,000 level after a two-day rally.
The main driver of this sentiment was data showing US companies cutting their workforce in November by the largest number since early 2023. This added to concerns that the US labor market is weakening further. The swap market now rates a more than 90% chance that the Fed will cut interest rates by 25 basis points this month. Analyst Jeff Roach of LPL Financial believes that labor market conditions are weak enough to give the Fed a strong reason to begin cutting rates.
In Asia, investor attention is focused on Japan's 30-year bond auction and regional currency movements. The weakening US dollar has given some Asian currencies some breathing room, but pressure remains. The Indian rupee briefly weakened, breaking through the psychological level of 90 per dollar, while the Chinese yuan has slowly strengthened, approaching 7 per dollar. This yuan strengthening reflects optimism about improving US-China relations, although Beijing appears to be keeping a tight rein on the rate of appreciation.
Other factors being monitored by the market include trade and geopolitical issues. The US is reportedly awaiting a substantial investment pledge from Taiwan in trade talks. On the corporate side, Nvidia CEO Jensen Huang admitted he was unsure whether China would accept H200 AI chips if the US relaxed export regulations, following his meeting with President Donald Trump. On Wall Street, market participants are still weighing the Fed's next steps, while tech giant stocks saw mixed results: Salesforce shares rose after delivering better-than-expected revenue projections, while Microsoft fell 2.5% after reports of weaker demand for some of its AI products. (asd)
Source: Newsmaker.id
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