Asian equities could trade flat as Wall Street peers traded sideways as participants digested further earnings releases. At the same time, geopolitical risks surrounding China’s military drills around Taiwan and the looming US Nonfarm Payroll data also added to the defensive mood. On the US jobs data, a particular focus will be on the resilience of jobs growth and any discrepancies between establishment and household surveys, with Fed policymakers setting weight on labour market strength as evidence against the economy already being in recession.
As traders are eying the NFP data tomorrow, it is worth keeping an eye on the Dollar as its extended selling yesterday. The downside selling flow came along with the US Treasury yields decline amid another rise in initial jobless claims, which fed participants’ concerns over the outlook for the labour market. On the geopolitical front, traders could take defensive positions going to the weekend as risks on China/Taiwan are still on the radar.
