The Asian markets may face a downturn following global risk aversion, particularly influenced by Wall Street‘s performance, where technology stocks are particularly vulnerable. This trend is a reaction to substantial losses in the tech-centric Nasdaq index, compounded by weaker-than-expected US data. However, traders are cautiously waiting for more definitive economic indicators before predicting further Federal Reserve rate cuts.
The market is currently in a consolidation phase as investors eagerly await the November US employment report on Friday. This report is pivotal; if it indicates slowing inflation on wages and a weaker job market, it could fuel expectations for rate cuts in 2024 as it will be the last job report of the year and before the last FOMC meeting. In China, the focus is on trade balance data, which could signal a moderation in the recent export decline, suggesting some stabilisation in the economy amidst a prolonged demand slump. Conversely, disappointing data could reinforce the cautious market sentiment, potentially leading to further declines in oil prices.
Investors are also closely monitoring today’s U.S. Jobless Claims and the upcoming U.S. Treasury bond auctions for different maturities next week. Additionally, the packed Central Bank schedule is on the radar, potentially leading to mixed short-term market movements due to profit-taking flows.