- Asian scholarships: https://tmsnrt.rs/2zpUAr4
- Asia ex-Japan index hits 5-week peak
- Most markets stagnate on risk of downside US jobs
- Bottlenecks worsen in Asian factories
- Oil pulls back after OPEC + increases production
SYDNEY, Sept. 2 (Reuters) – Asian stock markets were in a cautious mood Thursday as concerns grew over the Chinese economy after a series of weak data, while the risk of a lower-than-average US wages report average kept the dollar on the defensive.
A series of manufacturing surveys have suggested that supply bottlenecks are tightening again, with eight of nine Asian countries reporting longer delivery times.
The spread of the Delta variant amid still low vaccination rates in many ASEAN economies and China’s zero tolerance strategy against Covid have prompted governments to impose restrictions and order shutdowns of ‘factories / ports,’ Nomura analysts warned.
“Input shortages and low inventories are likely to lead to production cuts and delayed shipments in the third quarter.”
Uncertainty has kept China’s blue chips flat (.CSI300), although speculation over more fiscal stimulus has offered some support.
The largest MSCI Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) edged up 0.2% to a five-week high, helped by buying for the new quarter. Japan’s Nikkei (.N225) added 0.1%, while South Korea (.KS11) fell 0.6%.
Nasdaq and S&P 500 futures barely changed, while EUROSTOXX 50 futures fell 0.2% and FTSE futures fell 0.1%.
Wall Street was concerned to question US wages for August, expected Friday, the task made all the more uncertain by a disappointing reading of ADP private wages but a solid ISM survey on the manufacturing sector.[nN9N2NL019[readmore[nN9N2NL019[readmore[nN9N2NL019[lirelasuite[nN9N2NL019[readmore
Median forecasts point to a sharp increase of 750,000 jobs, but they range from 375,000 to 1.02 million, with the ADP report prompting speculation on downside risks.
Still, a low number could be positive for risk assets as it eases the pressure for an early Federal Reserve withdrawal.
“An impression closer to 400,000 rather than 800,000 actually means that the Fed’s condition of ‘further substantial progress’ in the labor market will take longer to materialize, thus delaying the cutback decision from September to November. “said Rodrigo Catril, senior currency strategist. at NAB.
“The bad news in the job market is good news for risky assets as the punch bowl will stay well liquefied for a bit longer.”
ECB HAWKS SON OFF
Amid the jobs chatter, 10-year Treasury yields fell back to 1.30% and away from the recent high of 1.375%, as the US dollar index hit a one-month low.
The euro also hit its highest level since early August at $ 1.1856 and last held steady at $ 1.1840.
The single currency was aided by hawkish comments from Bundesbank President Jens Weidmann, who warned of inflation risks and called for a slowdown in bond purchases by the European Central Bank. Read more
In contrast, the Bank of Japan shows no signs of reducing its massive purchases as the country remains mired in a decades-long battle against deflation.
This has kept the dollar firm at 110.00 yen and comfortably in the tight 108.71-110.79 range that has lasted for the past two months.
Commodities would likely benefit from any delay in the Fed’s cut, helping to support gold at $ 1,813 an ounce but below resistance around $ 1,823.
Oil prices eased after OPEC + agreed to stick to a policy of adding 400,000 barrels per day per month to the market, although it also defied the pressure for an increase even more important. Read more
“Ignoring White House calls for further barrel increases, we believe OPEC + will stay on course unless there is a marked deterioration in the demand outlook,” RBC analysts said. Capital Markets in a note.
“In addition, we reiterate that if there is a price bias for the majority of OPEC + members, it is upwards given the high budget break-even points of member states.”
Brent slipped 52 cents to $ 71.07 a barrel, while US crude fell 59 cents to $ 68.00.
Editing by Simon Cameron-Moore
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