Asian stocks mixed; NFP data in focus

Markets in Asia were mixed on Friday following a similar behavior from Wall Street’s top three indexes in the past session, with all traders looking ahead to NFP data ahead in the day.

Australia ASX +28.10 +0.47% 6,030.30 CLOSED

Shanghai Comp -11.57 -0.34% 3,371.74 CLOSED

Hang Seng Index +66.80 +0.23% 28,585.44 OPEN

Nikkei 225 +119.04 +0.53% 22,539.12 CLOSED

TSEC 50 Index +12.26 +0.11% 10,800.77 CLOSED

The previous session was marked by a few high-impact news, including the release of House Republican’s tax reform, Trump’s appointment of Jerome Powell as Fed chief and a fresh upbeat data that boosted expectations for bullish labor market reports on Friday.

Earlier today, investors digested China’s Caixin services PMI for October, which came in at 51.2. Few days before, the official non-manufacturing PMI had established at 54.3.

Japanese stock markets were closed in observance of the Culture Day holiday.

On Thursday, President Donald Trump appointed FOMC Governor Jerome Powell as the next chairman of the Federal Reserve. He will take the lead once Chair Janet Yellen steps down at the end of her term in February 2018.

Powell is seen as less hawkish than Yellen, but still within the same policy guidelines. Therefore, no substantial changes to the regulator’s monetary policy plan are expected for the future.

Meanwhile, House Republicans presented more details concerning its long-awaited tax-reform plan. According to the document, the US corporate tax rate would be cut by 15 percent.

On the data front, the US Labor Department said initial jobless claims dropped to 229,000 last week, down from a previous reading of 234,000 and 235,000 seen.

In a separate report, third-quarter productivity increased by 3.0 percent, above expectations for a 2.4 percent build. Unit labor costs were in line with estimated values at a plus 0.5 percent.

In other news, the Bank of England increased its interest rates by 25 basis points for the first time in more than a decade to 0.5 percent. The decision was mainly justified by rising inflation levels, despite the economy continues to show high levels of employment.

Ahead in today’s session, attention will be directed to October’s labor data at 12:30 GMT, including average hourly earnings, nonfarm payrolls and the unemployment rate. Economists are expecting an addition of 310,000 jobs and a 0.2 percent rise in salaries.

Fort Financial Services