China Yields Increase While Stocks Drop Ahead of US Jobs – Asia Market Wrap
Stocks and bonds fell in Asia after Friday’s strong US payroll data, while the pound extended last week’s decline amid concerns about the UK’s tight public finances.
MSCI’s regional equities index declined for the fourth day in a row as traders reduced their expectations on Fed interest rate cuts in the wake of the US jobs report. European and US equities futures indicated additional equity losses. Oil prices rose to a four-month high as a new round of US sanctions on Russia threatened to constrain supplies. A gauge of the dollar climbed to a two-year high.
Chinese equities fell further despite local statistics showing that exports reached a new high last year. This could be one of the last high moments in the country’s commerce, with Trump pledging to put even greater taxes on Chinese imports when he takes office next week.
Brent crude rose beyond $81 per barrel after gaining nearly 4% on Friday. That came after the US announced its most forceful and ambitious sanctions yet on Russia’s oil industry, targeting two major exporters, insurance companies, and more than 150 vessels. The increase in oil prices is expected to pose an additional problem for central bankers, particularly the Fed, if it leads to higher inflation.
The Pound fell as far as 0.7% to $1.2126, its lowest level since November 2023, following a 1.7% slide last week.
