(Bloomberg) — Asian stocks fell with European and US equity futures as traders trimmed bets on Federal Reserve interest-rate cuts after Friday’s payroll data. The pound prolonged last week’s slump.
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MSCI’s index of Asian equities slid for a fourth day, with benchmarks falling across the region. Oil climbed to a four-month high as a fresh wave of US sanctions on Russia threatened to crimp supplies. Bloomberg’s gauge of the dollar climbed to a two-year high.
“The market is absolutely going with the story that there might be less and fewer cuts” by the Fed, Eugenia Victorino, head of Asia strategy at Skandinaviska Enskilda Banken AB, said in an interview on Bloomberg Television. “At this point, you continue to have a lot uncertainty at the very least so far as the incoming Trump policies are concerned.”
The MSCI Asia Pacific Index dropped as much as 1.1%, putting the benchmark down greater than 3% this month.
Chinese shares prolonged losses even after local data showed exports rose to a record last yr. This may occasionally be certainly one of the last high points for the country’s trade, with US President-elect Donald Trump promising to impose even higher tariffs on Chinese goods when he takes office next week.
Brent crude climbed above $81 a barrel in early Asian trading, after surging almost 4% Friday. That was after the US imposed its most aggressive and impressive sanctions yet on Russia’s oil industry, targeting two large exporters, insurance firms, and greater than 150 tankers.
The pound slid as much as 0.7% to $1.2126, the weakest level since November 2023, following its 1.7% slump last week.
A “slowing economy, growing twin deficits of current account and monetary accounts are negatives for the pound,” said Christopher Wong, a foreign-exchange strategist at Oversea-Chinese Banking Corp. in Singapore.
Bonds Decline
Bonds dropped in Asia following last week’s Treasury declines. Australian 10-year yields climbed as much as 12 basis points to 4.66%, while Latest Zealand’s rose seven basis points.
US sovereign bonds had slumped on Friday after the December payroll data, sending the 30-year yield above 5% for the primary time in greater than a yr. There was no money trading of Treasuries in Asia Monday on account of a vacation in Japan.
China ramped up its support for the yuan with a warning and tweaks to its capital controls, after the currency dropped near a record low against the dollar in offshore trading.