Hang Seng Index, ASX 200, Nikkei 225: Fed Speakers Sink the ASX and Nikkei Futures

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Updated: Apr 4, 2024, 22:46 UTC

Key Points:

The Asian equity markets took relief from US Services PMI numbers and Fed Chair Powell assurances on Thursday.
On Friday, the overnight US jobless claims and FOMC member chatter will influence risk appetite as the focus shifts to the US Jobs Report.
On the Asian economic calendar, Australian trade data and household spending numbers from Japan will be in focus.

US Equity Markets: Initial Jobless Claims, Fed Speakers, and US Jobs Report Angst

On Friday, overnight US jobless claims and FOMC member speeches need investor consideration.

US initial jobless claims increased from 212k to 221k in the week ending March 30. The increase signaled a softer labor market before the all-important US Jobs Report. Despite the upswing in jobless claims, FOMC member speakers impacted bets on a June Fed rate cut.

FOMC member Thomas Barkin insinuated the Fed should be patient about cutting interest rates. Austan Goolsbee referenced housing services inflation as the stumbling block to cutting rates. Neel Kashkari suggested the Fed could stand pat in 2024 if inflation remains persistent.

On Thursday, the Dow and the S&P 500 saw losses of 1.36% and 1.23%, respectively. The Nasdaq Composite Index slid by 1.40%.

Asia Economic Calendar: Aussie Trade and Japanese Household Spending in Focus

On Friday, economic indicators from Australia and Japan will put the ASX 200 and Nikkei 225 in the spotlight.

Economists forecast the Australian trade surplus to narrow from A$11.027 billion to A$10.400 billion in February. Recent PMI numbers from China suggested improving demand. Better-than-expected trade terms could drive demand for ASX-listed trade-related stocks.

Household spending numbers from Japan may influence market sentiment toward the Bank of Japan interest rate trajectory.

The Bank of Japan is eyeing service sector activity and household spending to fuel demand-driven inflation. Spring wage hikes pointed to an improving demand environment. However, wage growth must translate into private consumption to signal a BoJ move from a zero-interest rate environment.

Economists forecast household spending to increase by 0.5% in February after sliding by 2.1% in January. A stronger Yen could impact Nikkei-listed export stocks.

Commodities: Crude Oil, Gold, and Iron Ore Price Trends

Commodity price trends will continue influencing the ASX 200 and sentiment toward inflation trends.

Crude oil prices were higher on Thursday. Iron ore and gold prices trended lower.

The USD/JPY, the Intervention Zone, and the Nikkei

On Friday, the USD/JPY remained within the intervention zone at 151.227. A move through the 152 barrier could raise the threat of an intervention to bolster the Japanese Yen.

Nikkei-listed export stocks remain sensitive to intervention rhetoric. While a pickup in household spending could ease Yen selling pressure, investors must consider the upcoming US Jobs Report. Hotter-than-expected US labor market data could drive the USD/JPY through the all-important 152 barrier.

The Futures Markets

On Friday, the ASX 200 and the Nikkei were down 63 and 730 points, respectively. The Hong Kong markets will reopen after the Ching Ming Festival holiday, putting the Hang Seng Index in the spotlight.

ASX 200

ASX200 050424 Daily Chart

The ASX 200 rose by 0.45% on Thursday, tracking the Nasdaq into positive territory. Tech stocks contributed to the gains following Fed Chair Powell comments from Wednesday. The S&P ASX All Technology Index (XTX) gained 1.04%. Gold (XAU/USD) and oil stocks also advanced. However, bank stocks had a mixed session, while mining stocks limited the upside.

Gold (XAU/USD) stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) ended the day up 0.82% and 1.06%, respectively.

Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) advanced by 0.10% and 0.64%, respectively.

ANZ Group Holdings Ltd. (ANZ) and Westpac Banking Corp. (WBC) saw gains of 0.76% and 0.77%, respectively. Commonwealth Bank of Australia (CBA) gained 0.46%, while National Australia Bank Ltd. (NAB) declined by 0.12%.

Rio Tinto Ltd. (RIO) and Fortescue Metals Group Ltd. (FMG) fell by 1.02% and 0.95%, respectively. BHP Group Ltd (BHP) declined by 0.25%.

Hang Seng Index

Hong Kong markets were closed on Thursday.

HSI 050424 Daily Chart

On Thursday, the Hong Kong markets were closed for the Ching Ming Festival.

The Nikkei 225

Nikkei 050424 Daily Chart

(Graph for reference purposes only)

The Nikkei advanced by 0.81% on Thursday.

Bank stocks extended their gains from Wednesday. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) rose by 1.05% and 2.55%, respectively.

It was a mixed session for the main components of the Nikkei.

Fast Retailing Co. Ltd. (9983) and Tokyo Electron Ltd. (8035) declined by 0.51% and 0.35%, respectively.

Softbank Group Corp. (9948) and Sony Group Corporation (6758) saw gains of 1.07% and 0.15%, respectively. KDDI Corp. (9433) ended the session flat.

For upcoming economic events, refer to our economic calendar.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.