Key Points:
- Asia Stocks Dip as Dollar Gauge Hovers Near Record
- Global bonds fall 20% from 2021 peak to enter a bear market
- US jobs data on Friday may add to case for large Fed rate hike
An Asian stock index fell Friday and a dollar gauge hovered near a record high ahead of key US jobs data that could stir expectations for another sharp Federal Reserve interest-rate hike.
Drops in Japan and Hong Kong sapped the region-wide equity index, while China’s bourses were mixed. US futures wavered after Wall Street snapped a four-day losing streak to eke out modest gains.
The jobs update Friday is expected to show healthy payrolls growth and follows a stronger-than-expected US manufacturing report. Traders increasingly anticipate another large 75 basis points Fed rate rise to cool inflation.
The two-year Treasury yield was close to the highest since 2007 against that backdrop, while the Bloomberg Dollar Spot Index inched back from the unprecedented level hit Thursday. The yen and the euro strengthened.
Oil bounced above $87 a barrel, undoing some of the losses sparked by China’s move to lock down the metropolis of Chengdu to curb Covid. The latter step amplified worries about the commodity demand outlook.
US data showed manufacturing growth steadied in August and that a measure of materials costs fell for a fifth month in a sign of easing inflation pressures.
The payrolls report later Friday is projected to show a 298,000 gain and solid wage growth. Federal Reserve Bank of Atlanta President Raphael Bostic said there’s still some work to do to contain price pressures.