Asia markets were set to open lower on Monday, following a sharp decline in U.S. stocks on Friday amid a stronger-than-expected jobs report that sent interest rates higher.
Australia’s SPI futures traded at 6,006, which was a touch lower than the ASX 200’s previous finish at 6,121.40.
Nikkei futures in Chicago were at 22,980 and Osaka futures traded at 23,040. The Japanese benchmark index closed the previous session at 23,274.53.
On Friday, the Bureau of Labor Statistics said the U.S. economy added 200,000 jobs in January. That number was higher than the 180,000 jobs expected by economists in a Reuters poll. Wages, meanwhile, rose 2.9 percent on an annualized basis. The report sent Treasury yields higher, adding to investor concerns that interest rates may be rising too fast.
One analyst said the move in the U.S. market still had some way to go — and that the pullback will continue to affect most equity markets.
“The past week has seen shares come under pressure as Fed rate hike expectations increased, partly reflecting an acceleration in U.S. wages growth, and the bond yield rose sharply,” Shane Oliver, head of investment strategy and chief economist at AMP Capital, said in a Monday morning note.
“It’s likely the pullback has further to go as investors adjust to more Fed tightening than currently assumed — we see four (or possibly five) Fed rate hikes this year against market expectations for three — and higher bond yields,” he added.
In the currency market, the Japanese yen traded at 110.27 to the dollar, weakening from an earlier high of 109.93. Meanwhile, the Australian dollar traded at $0.7913, dropping from levels above $0.8050 reached in the previous week.
The dollar index, which tracks the greenback against a basket of currencies, fell below 88.800 in the previous week.
On the data front, China’s Caixin services PMI number is due at 9:45 a.m. HK/SIN.
