Stocks Increase, Dollar Declines Ahead of US Jobs Data – Asia Market Wrap

Asian shares rose to a record high, but the Dollar fell ahead of Wednesday’s US jobs report, as sluggish retail sales bolstered expectations that the Fed will slash interest rates later this year.

The MSCI Asia Pacific Index climbed 1.1% to an all-time high, extending its year-to-date lead over European and US shares. A measure of emerging market performance also reached a new high. The euphoria appeared to spill over to Wall Street, as futures contracts for the S&P 500 and Nasdaq 100 indices rose. European stocks were poised for a flat opening.

Treasury futures rose further after 10-year bond yields fell to their lowest level in nearly a month during the US session. There was no cash trading in Treasuries during the Asian session since Japan was closed for a vacation. Gold, which generally benefits from rate reduction, climbed 0.5% as money markets increased their expectations of three Fed cuts this year, with two already fully priced. The Dollar fell versus all of its Group-of-10 counterparts.

Unexpectedly dismal December retail sales on Tuesday indicated slower consumer momentum as the year came to a close, bolstering predictions that the Fed may lower interest rates later this year. The focus now shifts to the jobs report and inflation data later this week for fresh clues on the policy outlook, even as shares tremble on fears about massive AI expenditure by technology corporations.

On Tuesday, the S&P 500 fell 0.3% due to losses in major technology stocks, but the gauge stayed close to the high set last month. Silver surged more than 1.6%, while Bitcoin plummeted to roughly $67,500.