(Bloomberg) — European and US stock futures fell even as Asian stocks climbed after jobs data reinforced expectations of a soft landing for the American economy. The focus is now on Bank of Japan Governor Kazuo Ueda’s briefing later Friday after the authority maintained interest rates.
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The Euro Stoxx 50 contract dropped 0.4% while S&P 500 futures lost 0.2%. The MSCI Asia Pacific Index rose as equities in Japan and South Korea advanced, while mainland Chinese shares slipped. A gauge of global stocks set a fresh peak Thursday.
The BOJ raised its assessment of consumer spending and reiterated that it expects price growth to be in line with its goal in the latter half of its projection period, an indication it remains on a path toward hiking rates. Data released earlier showed the nation’s key inflation gauge accelerated in August for a fourth consecutive month.
“The focus now shifts to Governor Ueda’s press conference,” said Shoki Omori, chief desk strategist at Mizuho in Tokyo. “Depending on the degree of this tone, if the hawkish stance is clearly conveyed to the market, the USD/JPY exchange rate is expected to trend downward.”
Treasury yields were little changed on Friday, while an index of dollar strength was locked in a narrow range. The yen gained as the BOJ left interest rates unchanged.
“We maintain our bullish conviction on the yen as the pickup in wage growth and uptick in inflation should keep the December hike live,” said Alex Loo, a macro strategist at TD Securities in Singapore. “Yen could also prove to be an effective hedging tool for defensive markets as we head into US election uncertainty and rising geopolitical risks.”
Read: Stronger Yen, Pressure on Stocks Among Top Calls After BOJ Holds
A drop in US jobless claims to the lowest since May signaled the labor market remains healthy despite a slowdown in hiring. This added a boost to risk appetite and eased concerns the Fed may have been too slow to trim borrowing costs when it cut rates by half a percentage point on Wednesday.
The equity gains on Thursday and Friday mark a “delayed euphoric reaction,” to the Fed but one that may retreat, according to Nick Ferres, Chief Investment Officer of Singapore-based Vantage Point Asset Management. “Valuation is already heroic and risk compensation is poor, particularly if the earnings cycle disappoints.”
Over in China, the country is considering removing some of the largest remaining curbs on home purchases after previous measures failed to revive a moribund housing market, according to people familiar with the matter. That pushed up a Bloomberg gauge of Chinese developers.
Meanwhile, the nation’s banks maintained their benchmark lending rates for September, as policymakers held off on further monetary stimulus while financial institutions struggle with record-low profit margins. The Securities Times reported on Friday that this week’s Fed rate cut has provided room for China to boost monetary and fiscal stimulus to support the economy.
Some Chinese electric car stocks like XPeng and SAIC Motor rose after the European Union and China agreed to intensify discussions to avert looming tariffs on EVs ahead of a deadline that’s only days away.
Elsewhere, Wall Street banks are divided on the pace and extent of upcoming Federal Reserve rate cuts. JPMorgan Chase & Co. expect another 50 basis point reduction in November, while Goldman Sachs Group Inc. anticipates 25 basis point cuts at each meeting from November to June next year.
In Asia, data set for release include inflation for Hong Kong and foreign exchange reserves for India.
In commodities, gold steadied near a record high while oil was on track for the biggest weekly advance since February after the US rate cut.
Key events this week:
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Eurozone consumer confidence, Friday
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Canada retail sales, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures fell 0.2% as of 6:51 a.m. London time
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Nikkei 225 futures (OSE) rose 1.8%
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Japan’s Topix rose 1.2%
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Australia’s S&P/ASX 200 was little changed
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Hong Kong’s Hang Seng rose 0.9%
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The Shanghai Composite fell 0.6%
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Euro Stoxx 50 futures fell 0.4%
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Nasdaq 100 futures fell 0.2%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.1164
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The Japanese yen rose 0.2% to 142.29 per dollar
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The offshore yuan rose 0.3% to 7.0450 per dollar
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The Australian dollar was little changed at $0.6812
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The British pound was little changed at $1.3295
Cryptocurrencies
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Bitcoin rose 1.2% to $63,795.7
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Ether rose 3.2% to $2,544.61
Bonds
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The yield on 10-year Treasuries was little changed at 3.71%
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Japan’s 10-year yield advanced one basis point to 0.860%
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Australia’s 10-year yield was little changed at 3.92%
Commodities
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West Texas Intermediate crude fell 0.2% to $71.80 a barrel
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Spot gold rose 0.3% to $2,593.83 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Hsu.
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