ASX futures were 6 points lower at 7:00am AEDT on Wednesday, suggesting a flat start.
U.S. stocks attempted to shrug off the previous session’s losses, with key indices trading in mixed territory ahead of U.S. jobs and GDP data due later this week.
The S&P 500 was down about 0.25 percent, and the Dow Jones Industrial Average slipped 0.07 percent. The Nasdaq Composite fell about 0.70 percent and the Russell 2000 rose about 0.37 percent.
Investors are on edge ahead of data this week, such as US Bureau of Labor Statistics job openings data for October on Wednesday and November payrolls data on Friday. Investors are also awaiting US Federal Reserve Chair Jerome Powell’s speech at the Hutchins Center on Fiscal and Monetary Policy at Brookings on Wednesday for clues about the central bank’s interest rate trajectory.
“It’s a data-rich chunk of time over the next 10 to 14 days,” said U.S. Bank’s senior investment director Bill Northey, in an interview on CNBC, and one that will help investors, and policy makers, see what is “necessary” in terms of slow economic growth, and to bring inflation lower.
In commodities, Brent crude added 0.35% to US$83.48 per barrel and gold rose 0.45% to US$1,749.27.
In local bond markets, Australian 2 Year government bonds were higher at 3.16% and 10 Year bonds rallied to 3.60%. Across the Atlantic, the 2 year US Treasury note yielded 4.48% and the 10 year US Treasury note yielded 3.75%.
The Australian dollar, meanwhile, was trading at 66.76 US cents compared to 69.50 at the previous close. The Wall Street Journal Dollar Index, which measures the U.S. currency against 16 others, slipped to 99.38.
Asia
China
China shares reversed early losses, which were concerned about protests over the ongoing zero-COVID policy with the benchmark Shanghai Composite up by 2.11% to 3149, Shenzhen Composite gained 2.14% to 2016 and ChiNext rose 1.78% to 2339. Traders may also be betting that some shift in China COVID policy, especially after a drop in infections for the first time in a week, could happen.
The authorities on Monday, however, had a decidedly clear-but-vague response to that decision, noting the protesters’ threat to stay in the legislative chambers until their demands were fully met. Hong Kong shares fell, with the city’s Hang Seng index dropping 1.63%, recovering ground after opening down about 4%. Tech shares were among the hardest hit, and the Hang Seng index fell around 2.07%. Hong Kong has seen an increase in COVID vaccination rates for the elderly.
Japanese stocks also fell, with the Nikkei 225 Index closing down about 0.48%. Losses were led by power, shipbuilding and steel industries.
Europe
European shares ended modestly lower amid investor jitters about COVID policy unrest in China. The pan-European Stoxx Europe 600 ended flat, while the German DAX fell 0.19% and the French CAC 40 ended flat. The basic resources sectors edged up by 2.7% and chemicals lost 1.7%.
The London FTSE 100 ended 0.51% higher at 7512 points. “Normal” is not quite back for the U.K. gilts market after the Bank of England’s intervention on Sep. 28, Governor Andrew Bailey told a lawmakers’ committee Tuesday. “We were probably within an hour of having a serious problem in the gilt market when the bank stepped in,” he said.
North America
US Shares sought to recover from Monday’s losses, with major indices seeing mixed fortunes, in the lead-up to key US jobs and GDP data due this week.
The S&P 500 was down about 0.25% and the Dow Jones Industrial Average slipped 0.07%. The Nasdaq Composite fell about 0.70 percent, and the Russell 2000 edged up about 0.37 percent.
Investors are nervously awaiting data, including US Bureau of Labor Statistics job openings data on Wednesday and November payrolls data on Friday. Investors are also awaiting a speech from US Federal Reserve Chair Jerome Powell at the Hutchins Center on Fiscal and Monetary Policy at Brookings on Wednesday to get a sense of the central bank’s path for interest rates.
“It’s a data-heavy period of time here for the next 10 to 14 days,” said Bill Northey, a senior investment director at U.S. Bank to CNBC, which will help investors and policymakers understand “what is necessary” in terms of slow economic growth to help lubricate a slowdown in inflation.
Portfolios are currently relatively more defensively positioned, Northey added, being moderately overweight to short-duration, high-quality fixed income instruments, which could include bonds and bills. He suggests underweight global equities.
