Asian markets experienced a sluggish start to the weekend on Friday, following a lackluster performance from Wall Street. The mixed US data released recently has done little to alter expectations that the Federal Reserve will cut interest rates next week. Investors have struggled to replicate the gains made last week, which were fueled by comments from central bank officials indicating a preference for further easing of monetary policy.
The jobs market has shown signs of softening, with payroll firm ADP reporting over 30,000 job losses in November. Although jobless claims and layoffs data released on Thursday were slightly better than expected, markets have priced in a 90% chance of a rate cut on Wednesday. The focus is now on the release of the personal consumption expenditures (PCE) index, the Fed’s preferred gauge of inflation, which is expected to be released later on Friday. A below-forecast reading could increase hopes for further rate reductions in 2026.
The debate surrounding the bank’s plans for the next 12 months continues, with inflation remaining above target. According to Michael Hewson of MCH Market Insights, the US labor market is showing signs of slowing, but it remains reasonably resilient. He warned that markets are pricing in the likelihood of another rate cut, and any delay could prompt a significant adverse reaction.
Wall Street ended the day on a tepid note, with the S&P 500 and Nasdaq slightly higher, while the Dow was marginally off. Asian markets followed suit, with Tokyo shedding over 1% and Hong Kong, Shanghai, Singapore, and Wellington also experiencing losses. However, Sydney, Seoul, Taipei, Manila, and Jakarta edged up.
In corporate news, Chinese artificial intelligence chip maker Moore Threads Technology made a remarkable debut in Shanghai, soaring over 450% after raising $1.13 billion in an initial public offering. The company’s successful listing is a significant development in the tech industry, and its performance will be closely watched in the coming days.
The release of key economic data, including the PCE index, will be closely monitored by investors and analysts. The Fed’s decision on interest rates will have significant implications for the global economy, and any unexpected moves could lead to market volatility. As the weekend approaches, investors will be keeping a close eye on developments, seeking to gauge the direction of the markets in the coming week.