Asian Stocks Rebound As Weak Data Reinforce Bets On Fed Cuts: Markets Wrap

Most Asian stocks bounced back from Wednesday's sell-off with global bond yields falling as a weak economic print in the US brought back wagers that the Federal Reserve will initiate a half-point interest cut in September.

The equity benchmark in Japan continued its plunge as Yen rose over 1% while the dollar weakened on signs of aggressive rate cuts. The Nikkei 225 was 0.56% lower at 36,840, and the Kospi was 0.43% up at 2,491 as of 08:08 a.m.

The benchmark gauge in Taiwan rose over a percent while the MSCI Asia Pacific index, excluding Japan, declined by 0.54% to 688.93 during the day.

The July job openings for the US fell to 7.67 million against the estimated 8.1 million, the lowest since the start of 2021, proving that a soft landing is difficult to come by for the world's largest economy. Traders will also focus on the upcoming monthly economic report for August on Friday, which will set the magnitude of the rate cuts.

Meanwhile, China's economic woes deepened with JPMorgan strategists downgrading the south Asian giant's stocks to neutral from overweight. This was done on a challenging outlook and heightened volatility around the US election. China is also mulling interest rate cuts on as much as $5.3 trillion of mortgages as authorities attempt to revive the property market and economy.

In a major update, India overtook the dragon nation to become the largest weighting in the MSCI EM investable market index (IMI) earlier this week. This will help draw more absolute foreign flows in the country's financial markets even as it competes with local participants for a share of the pie.

Nippon Steel Corp. will be in focus after Bloomberg reported that US President Joe Biden was said to block the Japanese steelmaker’s $14.1 billion takeover of United States Steel Corp.

The GIFT Nifty, an early indicator of the Nifty 50’s performance in India, was up 10 points or 0.04% at 25,358 as of 8:14 a.m.

The US stocks mostly ended lower on Wall Street as traders shifted focus to send treasury yields lower on weak jobs data. The yield on the 10-year Treasury note fell eight basis points Wednesday.

The S&P 500 and Nasdaq Composite slipped 0.16% and 0.30%, respectively. The Dow Jones Industrial Average rose 0.09%. Nvidia Corp. recorded its worst two-day plunge since October 2022 amid reports of the US Department of Justice subpoenaing the chipmaker as part of an antitrust probe.

Brent crude was trading 0.21% higher at $72.85 a barrel as of 06:02 a.m. Gold remained flat at $2,526.1 an ounce.

• U.S. Dollar Index at 101.27

• U.S. 10-year bond yield at 3.76%

• Brent crude up 0.21% at $72.85 per barrel

• Bitcoin was up 0.25% at $58,186.5

• Gold flat at $2,526.1.

• Eurozone retail sales on Thursday.

• US initial jobless claims, ADP employment, ISM services index on Thursday.

• Eurozone GDP on Friday.

• US nonfarm payrolls on Friday.

• Fed’s John Williams speaks on Friday.

(Source: Bloomberg)