How Do the Stocks Move upon U.S. Jobs Data Release?
As cautionary signals appeared in the bond market and oil traded around its lowest level since the start of the Ukrainian conflict, Asian equities rose on Friday ahead of U.S. employment data that would provide another indicator of the health of the world’s largest economy.
With the help of index heavyweight TSMC, which increased 3.2 percent, MSCI’s broadest index of Asia-Pacific shares outside of Japan gained 0.74 percent, making up ground it had earlier in the week lost because of unrest surrounding Nancy Pelosi’s Taiwan trip. As a result, the regional index is expected to end the week in positive territory for the third consecutive week. At the same time, Japan’s Nikkei rose 0.83 percent. Both the S&P 500 futures and the EUROSTOXX 50 futures saw gains of 0.2 percent.
The day’s big event, the U.S. employment report, is still to come as investors wait to see if the U.S. Federal Reserve’s rapid rate rise program is beginning to limit economic growth. After growing by 372,000 jobs in June, nonfarm payrolls are anticipated to rise by 250,000 jobs last month.
What to Expect from Sock Markets This Season?
According to Prashant Bhayani, chief investment officer for Asia at BNP Paribas (OTC: BNPQY) Wealth Management, they’re waiting to see a slowdown in the labor market, so if they get a huge miss, it will finally indicate the labor market is slowing, and they’ll see some more rallies in U.S. treasuries.
Already, several asset types are showing signs of slowing down. The equities market is focused on labor statistics. Still, according to Bhayani, the bond market indicates a strong likelihood of a recession. The difference between the rates on two-year Treasury notes and 10-year Treasury notes, which is a key indicator of the U.S. Treasury yield curve, hit 39.2 basis points overnight, the greatest inversion since 2000.
An inverted curve is frequently thought to herald a coming recession. The difference between the 10-year and two-year yields on Friday morning was still a sizable 36 basis points. The 10-year yield was 2.6936 percent, and the two-year yield was 3.0531 percent.