© Reuters. FILE PHOTO: A man wearing a face mask walks past a screen showing a chart showing the Nikkei indices share averages recently outside a brokerage firm, amid the coronavirus outbreak ( COVID-19), in Tokyo, Japan December 30, 2020. REUTERS / Issei K
By Kevin Buckland
TOKYO (Reuters) – Most Asian stocks fell on Friday, as the technology sector pulled in signs of a stabilizing U.S. economy stoking fears of higher inflation and the Federal Reserve. The US withdrew its stimulus measures earlier.
U.S. Treasury yields remained up after surging overnight, while the dollar also held on to its biggest gain since April, after better-than-expected jobs data raised expectations for a better-than-expected jobs outcome. Good results for nonfarm payrolls on Friday, while the service sector activity gauge rose to a record high.
down 0.4% while the broader level was flat, with the services and technology sectors leading the way.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3%, as Taiwan’s high-tech stock market fell 0.7%.
China’s blue chips bucked the trend, up 0.6 percent, after Beijing proposed cutting stamp duty on top financial firms. The Australian benchmark rose to a record above 7,300 and gained 0.5%.
“The overall market is still very bullish and the data we got from the US overnight is very, very positive,” said Kyle Rodda, a market analyst at IG in Melbourne. a market analyst at IG in Melbourne.
“I think the overall consensus is that there is some reasonably limited risk that the Fed will remove the punch.”
At the same time, he said investors will close their tech positions ahead of key US nonfarm payrolls data later in the global day, to insulate themselves from potential losses in the event of any economic downturn. doubt increase.
Futures showed a slightly lower open for European stocks with a 0.1% drop. London futures were mostly unchanged.
US futures, down 0.1%, after the index lost 0.4% overnight. The index slipped 1% on Thursday, while relatively better, down 0.1%.
US stocks fell slightly on news that President Joe Biden was willing to compromise on a proposal to raise corporate taxes.
The gain was as high as 1,6320% in Asia, after gaining nearly 4 basis points overnight.
The 0.7% rally held on Thursday, the largest since April, hovered around 90.60.
While Fed officials have repeatedly said they expect current inflationary pressures to be temporary and for monetary policy to be extremely easy to sustain for a while, they are also increasingly encouraging less demand. especially to start talking about reducing stimulus.
Investors are carefully analyzing economic data to gauge whether inflation could be sticky enough to force the Fed to ease.
Last month’s much weaker-than-expected nonfarm payrolls numbers knocked those expectations off course, weakening Treasury yields and the dollar.
This month, economists forecast private payrolls could add 600,000 jobs in May, after rising only 218,000 in April.
“Clearly, traders are including short-term USD selling in the jobs data,” Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a note to clients.
“I wouldn’t even try and predict this one, it’s a lottery, even though the so-called ‘whisper number’ is closer to 790,000.”
Gold continued to weaken after falling 2% on Thursday, its biggest since February, trading 0.2% lower on the day at $1,866.40 an ounce amid a strengthening dollar.
Crude oil steadied after Thursday’s pullback from the highest in more than two years after weekly inventories fell sharply while fuel inventories rose more than expected.
Futures rose 10 cents to $71.41 a barrel, after touching their highest since May 2019 in Thursday trading. US WTI rose 10 cents to $68.91 a barrel, from a high of $69.40 a day earlier, its strongest since October 2018.