Asian Markets Start November Cautiously Amid Mixed Global Economic Signals

Asian markets kicked off the month on a cautious note, with most indices lower as investors await key U.S. jobs data. Friday’s nonfarm payroll report, the U.S. presidential election, and the upcoming Federal Reserve meeting next week are expected to heavily influence market sentiment.

Wall Street and Futures: Tech Stocks in the Spotlight

Despite a selloff overnight, Nasdaq futures rose 0.5%, bolstered by a post-market jump in Amazon (NASDAQ:AMZN) of 5.3%, adding $104 billion in market cap. Intel (NASDAQ:INTC) also surprised with upbeat revenue projections, lifting shares 7% after hours. This rally helped lift European futures slightly, with EUROSTOXX 50 and FTSE futures both inching up 0.1%.

Asia-Pacific Shares: Japan and China Show Divergent Moves

In Asia, Tokyo’s Nikkei dropped 2.6% as a stronger yen cast doubt on Japanese exporters’ earnings outlook. The yen gained strength after less dovish comments from Bank of Japan Governor Kazuo Ueda, who hinted at a potential rate hike by year-end, reversing a nearly 1% loss in the yen overnight. The dollar was up 0.3% at 152.46 yen on Friday.

Meanwhile, MSCI’s Asia-Pacific index (excluding Japan) rose by 0.2% on gains in Chinese stocks, though still down 1.3% for the week. Chinese blue-chip stocks gained 0.5%, and Hong Kong’s Hang Seng index rose 0.9%, supported by positive factory activity data in China.

Oil Markets: Geopolitical Tensions Drive Prices Up

Brent crude prices rallied nearly 2% to $74.15 a barrel, marking a third consecutive day of gains. Reports suggested Iran was preparing a retaliatory strike on Israel, escalating geopolitical risks and sustaining the upward pressure on oil prices.

U.S. Jobs Data: Markets Await Key Economic Indicator

Investors are cautiously watching Friday’s U.S. payrolls data, with economists predicting an addition of 113,000 jobs in October. However, estimates vary widely—Goldman Sachs expects a modest 95,000 increase, while TD Securities forecasts only 70,000 new jobs, reflecting potential distortions from recent hurricanes and labor strikes. A Fed rate cut of 25 basis points is seen as highly likely (94% priced in) after recent data pointed to solid U.S. consumption and waning inflation.

Foreign Exchange: Pound Hits Lows, British Bond Yields Jump

The pound stayed near a 2.5-month low at $1.2891, with British bond yields spiking. Investors fear the UK’s new budget could fuel inflation, causing the Bank of England to adopt a slower rate-cutting pace, adding further caution to the currency markets.