Traders Face Geopolitical, Jobs Hurdles; Yen Drops: Markets Wrap

  • In Business
  • 2023-02-06 00:30:46Z
  • By Bloomberg

(Bloomberg) -- Stocks in Asia were mixed as investors digested an unexpectedly strong US jobs report and the downing of an alleged Chinese spy balloon that's aggravated geopolitical tensions.

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Shares opened higher in Japan, while South Korean and Australian stocks fell. Contracts for Hong Kong and US equities also declined. US-listed Chinese stocks slipped Friday after Bloomberg News reported that the Biden administration decided to postpone Secretary of State Antony Blinken's upcoming trip to China in light of the balloon, which loitered above sensitive US military instillations. It was later shot down, drawing protests from China.

The yen trimmed an earlier decline versus the dollar and yields on Japan's 10-year bond climbed after the Nikkei reported that the government had approached Bank of Japan Deputy Governor Masayoshi Amamiya about succeeding Haruhiko Kuroda as head of the BOJ. While Japanese Finance Minister Shunichi Suzuki said he hasn't heard anything of the governor nomination yet, investors assume a greater likelihood of the current ultra-easy monetary policy enduring if one of its architects succeeds Kuroda.

Adani Group assets are set for continued volatility this week, with one of the latest blows coming from Adani Enterprises Ltd. shelving plans for its first-ever public sale of bonds, according to people familiar with the matter. While declines in shares were less savage on Friday than in previous days, the stock rout has roughly halved the market value of firms in the Indian group since Hindenburg Research's claims for manipulation and accounting fraud.

"It's clearly very important to the country because the operating businesses are so widespread," Belita Ong, chairman of Dalton Investments, said on Bloomberg Television. "Our belief is that the government will take whatever steps are necessary to stabilize the situation, make sure the operating entities are working."

The dollar climbed versus most of its major counterparts Monday after a gauge of the greenback's strength rose more than 1% Friday, when figures showed a surge in payrolls and unemployment at a 53-year low. This points to persistent US inflation and bolsters the case for more rate increases from the Federal Reserve.

US stocks halted a three-day advance on Friday in a volatile session that saw equities swerve between modest gains and losses as investors contended with data pointing to a robust labor market.

The S&P 500 still notched a weekly gain that took the index to its highest level since August. The Nasdaq 100 also scored a weekly advance, despite heavy selling after Apple Inc., Alphabet Inc. and Amazon. com Inc. reported disappointing results Thursday.

Yields on Treasuries rose for the second day as investors took the jobs report as a signal the Fed has room to remain aggressive if inflation stays elevated. The two-year yield jumped about 20 basis at its intraday peak on Friday after touching a low for the year earlier in the week. Australia's three-year yield jumped more than 10 basis points at the open.

"We are concerned that on the back of this kind of jobs report, it definitely holds the Fed to a higher-for-longer path," said Lisa Erickson, senior vice president and head of public markets group at US Bank Wealth Management. "There are of course other data points that are going to come before the next meeting, but it certainly puts a placeholder that labor market continues to run some risk of being extremely tight."

Key events this week:

  • Earnings this week are scheduled to include: AP Moller-Maersk, Apollo Global Management, AstraZeneca, BNP Paribas, BP, CME Group, Duke Energy, KKR, Nintendo, PepsiCo, Semiconductor Manufacturing International, Siemens, SoftBank Group, Toyota Motor, Uber Technologies, Unilever, Walt Disney

  • Eurozone retail sales, Monday

  • Australia rate decision, Tuesday

  • US trade, Tuesday

  • Fed Chair Jerome Powell at the Economic Club of Washington, Tuesday

  • US President Joe Biden delivers the State of the Union address, Tuesday

  • India rate decision, Wednesday

  • US wholesale inventories, Wednesday

  • New York Fed's John Williams at event in New York

  • Sweden rate decision, Thursday

  • US initial jobless claims, Thursday

  • ECB President Christine Lagarde participates in EU leaders summit, Thursday

  • Bank of England Governor Andrew Bailey appears before Treasury Committee, Thursday

  • China PPI, CPI, BoP, Friday

  • US University of Michigan consumer sentiment, Friday

  • Fed's Christopher Waller and Patrick Harker speak, Friday

Some of the main moves in markets:


  • S&P 500 futures fell 0.3% as of 9:13 a.m. Tokyo time. The S&P 500 fell 1%

  • Nasdaq 100 futures fell 0.4%. The Nasdaq 100 fell 1.8%

  • Japan's Topix index rose 0.7%

  • South Korea's Kospi index fell 1.2%

  • Australia's S&P/ASX 200 index was little changed

  • Hong Kong's Hang Seng futures fell 0.4%


  • The Bloomberg Dollar Spot Index rose 0.2%

  • The euro was little changed at $1.0788

  • The Japanese yen fell 0.7% to 132.14 per dollar

  • The offshore yuan fell 0.3% to 6.8280 per dollar


  • Bitcoin rose 0.4% to $22,990.96

  • Ether rose 0.7% to $1,634.01


  • The yield on 10-year Treasuries advanced four basis points to 3.57%

  • Australia's 10-year yield advanced 12 basis points to 3.50%


  • West Texas Intermediate crude rose 0.3% to $73.63 a barrel

  • Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Peyton Forte, Isabelle Lee and Richard Henderson.

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©2023 Bloomberg L.P.


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