By Wayne Cole
SYDNEY (Reuters) – Asian stock markets got off to a cautious start on Monday ahead of a week full of economic news that will confirm the relative outperformance of the United States and support the dollar's continued uptrend.
The star of the US streak is Friday's December jobs report, with analysts expecting a rise of 150,000 with the unemployment rate remaining at 4.2%.
This data will be previewed through ADP employment, job openings and weekly unemployment claims data, along with surveys on manufacturing, services and consumer sentiment.
Anything optimistic would support the case for a rate cut by the Fed, and markets have already cut their forecasts to just 40 basis points for 2025.
Minutes from the Fed's latest meeting scheduled for Wednesday will provide color to their expectations, while there will be plenty of live commentary with at least seven top policymakers speaking including influential Fed Governor Christopher Waller.
Inflation figures from the European Union and Germany this week will improve expectations for further interest rate cuts from the European Central Bank, while consumer prices in China on Thursday are expected to support the case for further stimulus there.
With so much risk ahead, investors were understandably cautious, and MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1%.
He returned from vacation still in a relaxed mood and rose 0.1%. South Korean stocks rose 0.3%, although the fate of President Yeon Suk-yeol does not seem clearer.
The lucky few
Nasdaq and NASDAQ futures were flatter in early trading.
Analysts at Goldman Sachs noted that the S&P 500 had a total return of 25% in 2024, the second year of gains above 20% and the last time that happened was 1998/99.
The rise was limited, with about half of the rise coming from just five stocks, though Goldman expects another 11% increase this year driven by a similar rise in earnings. Reports on the latest earnings season start rolling in on January 15.
The US bond market was not so lucky, and 10-year bond yields rose to 4.631%, very close to the eight-month high reached last week at 4.641%.
Investors' appetite will be severely tested this week by the sale of $119 billion in new 3-, 10- and 3-year Treasuries.
A steady rise in yields kept the rally at 108,950, after rising nearly 0.9% last week to a peak of 109,540.
The euro remained steady at $1.0298, uncomfortably close to its 26-month low of $1.0225 hit last week. It is now facing resistance around the $1,0340 area, as trend-following funds continue to yearn to reach the psychological $1,000 level.
The dollar extended its advance last week to sweep the pound as well, pushing it to an eight-month low of $1.2349. The British pound recently appeared very unstable at $1.2420.
The risks of Japanese intervention kept the dollar stable at 157.63 yen, slightly below the highest level recorded last month at 158.09.
The strength of the dollar was an obstacle for gold, keeping the metal at $2,641 per ounce. (Ghoul/)
Oil received support from cold weather in Europe and the United States, with a winter storm bringing snow, ice and freezing temperatures to a wide area of the United States on Sunday. (or)
It rose 19 cents to $76.70 per barrel, while it added 27 cents to $74.23 per barrel.
