- Wave of weak US data fuels fears of slowdown
- US jobs data on Friday when many markets are on holiday
- Stocks, oil weak while bonds, haven currencies offer
TOKYO, April 6 (Reuters) – Asian equities and US stock futures fell on Thursday, while bonds and the safe haven US dollar and Japanese yen were bid as mounting evidence of a US slowdown raised worries about a global recession fueled.
Investors tended to take money off the table after recent strong gains and with many global markets being dormant on Good Friday when potentially crucial monthly US payrolls data is due.
Chinese blue chips (.CSI300) are down 0.27%. Hong Kong’s Hang Seng (.HSI) was roughly flat, but tech stocks in the index fell 0.8% (.HSITECH)
Japan’s Nikkei (.N225) fell about 1%, helping MSCI’s broadest index of Asia-Pacific equities (.MIAP00000PUS) fall 0.8%. The Asia-wide index had risen more than 5% since mid-March and closed at a 1 1/2 month high on Tuesday.
South Korea’s Kospi (.KS11) is down 0.6%, while Australia’s equity benchmark (.AXJO) is down around 0.3%.
US Nasdaq E-mini futures pointed to a 0.45% restart lower after the tech stock benchmark tumbled 1% overnight. E-mini futures for the broader S&P 500 showed a 0.24% drop at the reopening, extending Wednesday’s 0.25% drop.
Overnight data showed that private US employers hired far fewer workers than expected in March, adding to signs of easing in the job market earlier in the week.
The country’s service sector also slowed more than expected, while earlier figures also showed shutdowns at factories.
“Cracks are visible in US economic data this week and fears of a slowdown are surfacing again,” spurring investors to sell off riskier assets and switch to safer assets, including Treasuries and the dollar, wrote IG analyst Tony Sycamore in a customer announcement.
“It makes sense to plan for some risk ahead of the Easter long weekend,” he said. “All eyes are now on Friday’s release of non-farm payrolls.”
As signs of a significant slowdown in the US mounted this week, traders have been pricing in a more dovish Fed. Money markets are now eyeing the odds of another quarter point hike in the May session versus a pause as a coin toss. And 71 basis points of easing is priced in by the end of the year.
As a result, government bond yields have fallen. The 10-year bond yielded around 3.30% in Tokyo, staying close to a nearly seven-month low of 3.266% set overnight.
This helped the yen, which is very sensitive to US yields, to gain against the greenback, another safe haven.
The dollar slipped 0.13% to 131.15 yen but was higher against most other majors. The dollar index rose 0.12% to 101.99, continuing its recovery from a two-month low.
The risk-sensitive, commodity-linked Australian and New Zealand dollars each slipped about 0.3% against their US counterparts. The euro fell 0.16% to 1.0891%.
Crude oil was under pressure, with West Texas Intermediate down 57 cents to $80.04 a barrel and Brent down 61 cents to $84.38.
(This story has been corrected to correct the erroneous reference to the Thursday Chinese market holiday in paragraph 3.)
Reporting by Kevin Buckland; Editing by Christopher Cushing
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