Market News & Analysis
Equity Brief: Asian Stocks Do Not Like A Robust U.S Job Market
Kelvin Wong July 8, 2019 6:42 AM
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.
*Data from Refinitiv. Index names may not reflect tradable instruments and not all markets are available in all regions.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.