Markets Overview

  • ASX SPI 200 futures up 0.1% to 7,960.00
  • Dow Average down 0.5% to 40,755.75
  • Aussie up 0.2% to 0.6741 per US$
  • US 10-year yield fell 2.8bps to 3.7269%
  • Australia 3-year bond yield fell 2.9 bps to 3.54%
  • Australia 10-year bond yield fell 2.4 bps to 3.93%
  • Gold spot up 0.8% to $2,516.59
  • Brent futures up 0.2% to $72.83/bbl

Economic Events

  • 11:30: (AU) July Owner-Occupier Loan Value MoM, prior 0.5%
  • 11:30: (AU) July Investor Loan Value MoM, prior 2.7%
  • 11:30: (AU) July Home Loans Value MoM, est. 1.0%, prior 1.3%
  • 16:30: (AU) Aug. Foreign Reserves, prior A$94.4b

Stocks, bonds and major currencies held to tight ranges Friday as traders prepared for US jobs data that will help determine the size of a Federal Reserve rate cut later this month.

Shares in Japan fluctuated, as the yen stabilized after a rally this week, while those in Australia were little changed. Futures for US equities slipped after the S&P 500 ended Thursday lower. Pre-opening trading of Hong Kong securities was shut Friday due to Super Typhoon Yagi.

Treasury yields opened steady in the Asian session after minor declines Thursday, adding downward pressure on the greenback. The Bloomberg dollar index, which tracks the US currency against a basket of peers, inched lower early Friday after a 0.2% drop on Thursday. Australian and New Zealand bonds were little changed.

The muted moves come ahead of a nonfarm payroll report that will cast fresh light on the health of the US jobs market. Traders are still pricing in over 100 basis points of easing this year, implying a potential super-sized reduction. Given Jerome Powell’s recent emphasis on the labor market, many on Wall Street say payrolls will dictate whether the central bank cuts by 25 or 50 basis points this month.

There is limited event risk to be concerned about in Asia today, “so again the session will be defined by further pre-positioning ahead of US payrolls,” said Chris Weston, head of research at Pepperstone Group in Melbourne. “Traders will use the time in front of the screens to review, massage and manage positioning and exposures and the possible cross-market volatility that can kick up.”

Elsewhere in Asia, China may be facing new export controls on critical technologies by the Biden administration. Washington has cracked down on China’s ability to access cutting-edge technologies needed for artificial intelligence, over fears that advanced chips and components could lend Beijing a military edge.

Markets will also be keeping a close eye on China’s bond market as some government debt the central bank bought recently is now being sold in the secondary market, according to traders – a possible sign that authorities are once again intervening to curb a debt rally.

Meanwhile, Thailand’s parliament passed a 3.75 trillion baht ($111 billion) budget allowing newly-appointed Prime Minister Paetongtarn Shinawatra to lift state spending to accelerate the nation’s economic recovery.