Asian stocks are trading mixed after a smooth handover from Wall Street, where sentiment was mired on month-end trade, although the losses were limited, and all major indices nicked a seventh consecutive monthly gain for August. Global participants are now positioning for US employment data and PMIs this week. Worth paying close attention to the market positioning ahead of Friday’s US Nonfarm Payroll readings as Fed Chair Powell recently suggested that a “careful focus on incoming data” will be a helpful guide for monetary policy. Some participants already started positioning for slightly hawkish data, which caused the USD strength and US Treasury Curve to steepen yesterday after the month-end fixing.
On the macro front, another blow for APAC economies and global emerging markets as China’s August Caixin manufacturing PMI came in at 49.2 versus 50.2 expected. The mounting downward pressure on economic growth could create another wave of cautious positioning on risk assets, equities, FX and sovereign and high-yield bonds in the region before European trade.
