Global Anticipation for the U.S. Jobs Report and Its Impact: Global markets are on edge as the highly anticipated U.S. jobs report approaches,
with expectations that it will significantly influence regional and global markets.
Investor caution dominates in Wall Street and Asian markets, reflecting subdued performance across indices and stocks.
Content
Wall Street
Asian Stocks
Inflation and Interest Rates
Jobs Data and Expected Impact
Market Outlook
Conclusion
Wall Street: Limited Movement and Treasury Recovery
Wall Street investors refrained from making significant bets in recent sessions ahead of Friday’s jobs report.
Stocks experienced slight fluctuations, with the S&P 500 reclaiming its key psychological level of 5900 points after a brief dip.
U.S. Treasury bonds also recovered, aided by a strong $22 billion bond sale that alleviated pressure from recent sell-offs.
According to a Citigroup report,
options markets predict the S&P 500 may move by 1.2% in either direction following the jobs data,
reflecting cautious anticipation of its impact.
This reflects the global anticipation for the U.S. jobs report, as its outcome will set the tone for the markets.
Asian Stocks: Declines Driven by Chinese Concerns
On the other hand, Asian stocks retreated following Wall Street’s subdued session.
Markets in Japan, Australia, and China reported declines,
while U.S. futures were affected by volatility.
Additionally, reports of the Biden administration planning further
restrictions on the export of AI chips negatively impacted Nvidia’s performance.
Pessimistic expectations for the Chinese economy further pressured regional markets.
In December, consumer inflation in China edged closer to zero,
while producer prices fell by 2.3%, missing forecasts.
Meanwhile, the Australian dollar weakened amid lower-than-expected retail sales,
fueling expectations of a rate cut.
The Japanese yen gained slightly against the U.S. dollar.
Inflation and Interest Rates: Continued Caution
Recent Federal Reserve minutes revealed a cautious approach to cutting interest rates due to inflation risks.
Christopher Waller, a Federal Reserve official,
reiterated expectations of inflation gradually declining toward the 2% target.
Despite these concerns, U.S. market indices posted modest gains.
The S&P 500 rose 0.2%, the Dow Jones Industrial Average increased by 0.2%, and the Nasdaq 100 remained unchanged.
The 10-year U.S. Treasury yield fell two basis points to 4.67% on the bond side.
Jobs Data and Expected Impact
Forecasts suggest U.S. companies slowed hiring last month,
reflecting moderate growth in the labor market.
A study by 22V Research revealed heightened investor focus on the jobs report,
with 40% viewing the data as a potential adverse risk.
Tom Essaye of The Sevens Report commented,
“Investors want to see data indicating a labor market slowdown,
which would help ease yields and stabilize stocks.”
Market Outlook: Volatility Ahead
Experts predict market volatility in the first half 2025 and significant improvements in the latter half.
Mike Wilson of Morgan Stanley highlighted
that the key difference between now and 2022 is the less aggressive pace of rate hikes compared to last year.
Meanwhile, Goldman Sachs strategists warned that rising bond yields without positive economic data could increase pressure on stocks.
At the same time, Deutsche Bank analysts noted that past severe market losses were often driven by recessions,
which are not currently anticipated, given positive economic growth indicators.
Conclusion
Markets remain focused on the U.S. jobs report and its potential implications for Federal Reserve policy.
Volatility is expected to persist, but optimism surrounding a second-half recovery could provide support for global markets.
Global Anticipation for the U.S. Jobs Report and Its Impact
