Equity Brief: Asian Stocks Do Not Like A Robust U.S Job Market

A summary of the stock market trends & highlights from today's Asian mid-session

Stock market snapshot as of [08/07/2019 0505 GMT]

  • Ahead of the European opening session, a wave of profit taking activities sweep across the board for Asian stock markets with losses between -1.00% to -2.00% as at today’s Asian mid-session. The main culprit to blame is last Fri, 05 Jul better than expected U.S. non-farm payrolls data/jobs numbers that has tampered the Fed’s rate cut expectations in the upcoming FOMC meetings.
  • Based on the latest Fed funds futures pricing data from CME FedWatch Tool, the probability of two Fed funds rate cuts (50 bps) for the upcoming 31 Jul FOMC meeting has been reduced to 8% from 19.9% a week ago. Interestingly, the S&P 500 E-mini futures has fallen by a lesser magnitude versus its Asian peers where it only dipped by 0.38% from last Fri, 05 Jul close to print a current intraday low of 2982 in today’s Asian session.
  • It seems that Asia Pacific stocks are more vulnerable to downside if global liquidity conditions start to tighten again due to a higher debt levels denominated in USD relatively versus the rest of the world.  Overall, from a technical analysis perspective, the major stock indices in our coverage are in the midst of completing a potential medium-term topping process after a potential residual push up for this week (click here to read our latest outlook report).
  • European stock indices CFD futures are also faring better at this juncture where both the FTSE 100 and German DAX are showing modest losses of -0.19% and -0.43% respectively.

Macroeconomic Calendar

*Data from Refinitiv. Index names may not reflect tradable instruments and not all markets are available in all regions.

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