A mixed bag of economic data from the United States is set to impact Asian markets on Monday, with higher-than-expected bond yields and inflation fears leading the charge. The U.S. economy created over 250,000 new jobs last month, while the unemployment rate fell to its lowest in years.
However, this positive news for labor markets has a detrimental effect on asset markets, particularly in emerging economies. Treasury yields surged to their highest level in over a year, causing investors to sell stocks and take on more risk by investing in bonds. This has pushed the S&P 500 to its lowest level since November.
Japanese futures are pointing to a drop of over 1% at the open, while markets in China, India, and other Asian economies are expected to follow suit. Economists are warning that this could have a negative impact on growth in Asia, particularly if the incoming Trump administration’s “America First” trade policies come into effect.
The first set of major economic indicators from China is due out on Monday, including data on exports, imports, and retail sales. Investors will also be watching for any updates from the People’s Bank of China regarding its stance on interest rates and currency management.
Additionally, the Asian Economic Forum in Hong Kong gets underway, featuring prominent speakers such as Eddie Yue, Liu Haoling, and Philip Lane. Meanwhile, India is expected to release new inflation data, which could provide further insights into the country’s economic health.
Overall, Monday promises to be a volatile day for Asian markets, with investors facing uncertainty over global growth and trade policies.
Source: https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-2025-01-12