Asian Markets Slip as Investors are in Limbo

This morning, markets in the Asian and Pacific Rim stuttered as the post OPEC rally has petered out. The strength in the US Dollar has also paused as investors are waiting on today’s non-farm payroll report (NFP) due out of the United States.

The S&P ASX 200, in Australia, was down 0.75 percent as there was broad based losses across all sub-indices. Only the gold sub-index was higher this morning, as it rose over 1.5 percent. In Australia, the October retail sales came out 0.5 percent over last month. This was the third month in a row of gains. This was above expectations of a 0.3 percent print.

The Nikkei 225 was lower this morning as the yen gained strength. This pulled exporting plays lower as they tend to do better with a weaker yen. In South Korea, the Kospi Composite Index lost 0.7 percent. Korean data showed that the revised third quarter gross domestic product (GDP) was up 0.6 percent from the previous quarter. South Korea is embroiled in a political scandal involving President Par Geun-hye who has offered to quit as opposition parties are calling for her to be impeached.

There was a weak lead-in from the US markets as well as the looming Italian referendum weighing on sentiment. Also due out later today is the all-important US NFP figures. Analysts are expecting 165,000 new jobs to be added last month and the unemployment rate to remain steady. The non-farm payrolls are a key indicator that the Federal Reserve looks at and it is due later in the day.

Given that there are rising expectations for inflation as well as significant fiscal stimulus being touted by the incoming Trump administration, the US Federal Reserve is likely to be far less dovish with monetary policy going forward.