Asia Markets Mixed Ahead of U.S. Job Report

Asian equity markets were mixed on Friday as bonds climbed following a Wall Street Journal report that U.S. Special Counsel Robert Mueller was said to have impaneled a grand jury in the ongoing Russia probe.

Benchmark gauges fell in Japan and Australia, while South Korea’s Kospi index rose after Thursday’s plunge. Investors in Asia awaiting the monthly U.S. jobs report for clues on U.S. interest rates largely shrugged off the news out of Washington where Mueller is probing Russia’s interference in 2016 U.S. elections as well as possible collusion with the Trump campaign. Australian government bonds yields slid in line with the slump in Treasury and bund yields, while the yen held on to losses, weighing on Japanese stocks. The Australian dollar tested the session’s low after the country’s central bank cut its growth forecast, before rebounding.

Geopolitics took center stage again ahead of the closely watched U.S. employment report that may provide clues on the strength of the world’s largest economy and the Federal Reserve’s next policy move. A largely expectation-topping earnings seasons rolls on, with Toyota Motor Corp. among the largest companies due to update investors on progress.

The Reserve Bank of Australia lowered its forecast economic growth by half a percentage point this year to 2 percent to 3 percent, and a quarter-point in the first half of next to 2.5 percent to 3.5 percent, saying in its quarterly monetary-policy statement that the Aussie dollar “had a modest dampening effect” on GDP growth.

The U.S. jobs report for July may show the economy is on a steady trajectory and the labour market is staying tight, according to Bloomberg Intelligence. Consensus expects an increase of 180,000 in non-farm payrolls, after a gain of 222,000 in June, and a decline in unemployment to 4.3 percent from 4.4 percent. The data will also signal if income gains are enough to keep consumer spending ticking.

Here are the main moves in markets:

Stocks

· Japan’s Topix index slid 0.1 percent and Australia’s S&P/ASX 200 Index lost 0.2 percent. South Korea’s Kospi was up 0.3 percent. Hong Kong’s Hang Seng Index was added 0.1 percent, while the Shanghai Composite Index rose 0.4 percent.

· Futures contracts on the S&P 500 Index were little changed as of 2:17 p.m. in Tokyo. The main gauge lost 0.2 percent on Thursday.

Currencies

· The Aussie fell as low as 79.34 U.S. cents before shrugging off the RBA report to rise 0.1 percent to 79.59. It’s set for its first weekly decline since the start of July. The central bank said the recent appreciation of the exchange rate has had a “modest dampening effect” on growth forecasts.

· The yen was little changed against the dollar at 110.10 after falling Thursday.

· The euro traded at $1.1880, on course for a fourth week of gains.

· The Bloomberg Dollar Spot Index was little changed.

Bonds

· The yield on 10-year Treasuries held at 2.22 percent after declining five basis points on Thursday.

· Ten-year yield on Australian government notes fell four basis points to 2.63 percent.

Commodities

· West Texas Intermediate crude extended losses, falling 0.2 percent to $48.95 after losing 1.1 percent in the previous session.

Gold was down less than 0.1 percent at $1,268.05 an ounce.

Source: Bloomberg

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