Asia-Pacific markets traded lower on Monday, reacting to the strong US jobs report from Friday that dampened investor expectations of an early interest rate cut by the Federal Reserve, CNBC reports.
Despite stronger-than-expected trade data from China, global investor sentiment remains cautious as bond yields climb and concerns about higher borrowing costs persist.
China’s December trade figures showed exports rising 10.7% year-on-year, well above expectations of 7.3% growth, while imports unexpectedly increased by 1%, defying forecasts for a 1.5% decline. However, despite this positive data, mainland China’s CSI 300 index fell 0.27% to 3,722.51, continuing its downward trend after hitting its lowest level since September 2024 last week.
Investors in the region are also focusing on China’s bond market after the People’s Bank of China suspended purchases of government bonds on Friday, contributing to the country’s 10-year bond yield reaching a record low this month. Additionally, China’s yuan hit a 16-month low against the US dollar last week, with the offshore yuan continuing its decline since September.
In Hong Kong, the Hang Seng Index fell 0.73%, dipping below the 19,000 mark for the first time since last September. Indian markets also saw losses, with the Nifty 50 index down by 0.95% and the BSE Sensex falling 0.80%. South Korea’s Kospi and Kosdaq indices dropped 1.04% and 1.35%, respectively, while Australia’s S&P/ASX 200 decreased by 1.23%.
Japan’s markets were closed for a holiday, but other regional indices felt the ripple effect of the US employment data. The US jobs report revealed that 256,000 jobs were added in December, far exceeding analysts’ expectations of 155,000. As a result, the unemployment rate fell to 4.1%, pushing bond yields higher and fueling concerns that the Fed may hold off on anticipated rate cuts.
The upcoming economic data in Asia will likely keep investors on edge. India is set to release its inflation numbers later today, while the Bank of Korea is meeting on Thursday. Additionally, China will publish its fourth-quarter GDP data on Friday, along with figures for industrial output and retail sales, which may provide further clues on the economic outlook in the region.
Amidst these market dynamics, oil prices saw a rise, continuing their rally after the US imposed new sanctions on Russia’s energy sector. Brent crude gained 1.76%, reaching $81.16 per barrel, while West Texas Intermediate futures rose 1.89% to $78.02 per barrel.
