Asian markets mixed as attention turns to US jobs

Asian markets mixed as attention turns to US jobs

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Hong Kong: Asian stock markets were mixed on Friday as investors tried their best to promote recovery after the start of the turbulent new year this week. The key US employment data released later in the day became the focus.

News that the Federal Reserve is planning a more aggressive campaign to fight surging inflation rattled global traders, who have enjoyed almost two years of cheap cash that has helped push some markets to record or multi-year highs.

The Fed’s decision to remove the support put in place at the start of the pandemic comes as the world’s top economy continues to show resilience, with unemployment falling, despite supply chain snarls and rising energy costs that have sent prices racing.

Minutes released Wednesday showed the positive view on the recovery has led the US central bank to start hiking interest rates sooner and quicker than had been expected.

There are also signs that officials are considering reducing their large bond holdings, which has put further upward pressure on loan costs-according to Bloomberg News, U.S. Treasury yields will set their biggest weekly increase since 2020 .

The minutes of the meeting caused global markets to plummet, and technology companies were the hardest hit because they rely more on debt to drive growth.

Wall Street expanded its decline on Thursday, but the sell-off was less severe.

Asia performed slightly better, with Hong Kong, Shanghai, Sydney, Singapore, Seoul and Jakarta all on the list, but Tokyo, Wellington, Taipei and Manila declined.

“We knew coming into 2022 that the Fed was going to be a creator of volatility within the market and we’re seeing that right out of the gate at the start of the year,” Lindsey Bell, at Ally Invest, told Bloomberg News.

“The good news is that… things seem to be stabilising a little bit after (the initial) knee-jerk reaction.”

Eyes are now on the release of the closely watched non-farm payrolls figures for December, which could play a major role in the Fed’s decision on when and how quickly to lift rates.

A figure way above the forecast 447,000 new posts could force officials to take a more hawkish tilt, which would likely weigh further on equities.

Crude markets built on their recent run-up as concerns about the impact of the fast-spreading Omicron Covid variant fade, allowing traders to focus on the demand picture.

While crucial consumer China continues to battle outbreaks by imposing new lockdowns, unrest in producer Kazakhstan and a drop in output from Libya was providing support.

“Oil has rallied in recent weeks as financial markets have dismissed Omicron, rightly or wrongly, as a temporary aberration,” said OANDA’s Jeffrey Halley.

“That momentum accelerated this week, despite OPEC+ hiking production, and now we have Kazakhstan and Libya disruptions adding to the bullishness.”

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