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Asia Stocks Trade Mixed As Weak US ISMs Stoke Some Payroll Nerves

Asia Stocks Trade Mixed As Weak US ISMs Stoke Some Payroll Nerves

David Cottle, Analyst


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Asia Pacific Stocks Talking Points:

  • Major equity indexes were mixed as the week drew to its end
  • Worries about a slowing US economy has capped risk appetite but it was evident in places
  • Employment data will offer another crucial clue

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The US labor market was in focus for Asia Pacific investors Friday, with stock markets nervous before the release of September’s official figures later in the global session.

The data aren’t expected to mirror the weakness seen in the latest set of manufacturing and service sector data Stateside but, as those releases sprung unpleasant surprises, caution is understandable. The market is looking for 145,000 new non-farm jobs. That would be nothing particularly special by the recent standards of this series, but the unemployment rate may be more important at this point. It’s expected to stay at 3.7%, well below the 4% level above which more economists would start to worry about job creation.

Friday’s regional news wasn’t encouraging. Australian retail sales came in below expectations for August, if only just. They rose by 0.4% when the market had hoped for a 0.5% rise. Hong Kong ‘s government is reportedly set to discuss laws to ban the wearing of facemasks at protests, but no one can be sure what effect if any such a law would have on civil unrest in the territory. The Hang Seng certainly didn’t take the prospect well. It was down 0.5% as its afternoon trade got under way.

The Nikkei 225 as down too, but only by 0.02%, well above its morning lows. Mainland Chinese markets remained closed for holiday. The ASX 200 added 0.4%, with Biotech name CSL especially well-bid. Shares in Commonwealth Bank of Australia were only slightly lower after the bank admitted that the Director of Public Prosecutions had made criminal charges against the bank for alleged contravention of the Corporations Act relating to life-insurance sales.

The US Dollar was initially rocked by those weak service sector numbers from Thursday, but its Asia-session losses against the likes of the Japanese Yen and the Australian Dollar were not large. The New Zealand Dollar remains under pressure from both global risk aversion, allied to low and probably falling local interest rates along with weak business confidence.

USD/JPY has so far limped into a new calendar quarter with nothing to show but falls on the daily chart.

Given the economic news this is perhaps unsurprising.

US Dollar Vs Japanese Yen, Daily Chart

The pair has broken below support from its previous significant low, that of September 25 at 107.01. It’s now firmly back at the 106 handle with august 29’s closing high of 106.45 in focus.

Asia Pacific Stocks Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter @DavidCottleFX or use the Comments section below to get in touch!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.