Morning Bid: Sell the Rip

People pass an electronic screen displaying Japan’s Nikkei stock price index in a conference hall in Tokyo, Japan June 14, 2022. REUTERS/Issei Kato/File Photo

September 5 (Reuters) – A look at the Asian markets ahead of Jamie McGeever

Wall Street’s late jump into the red on Friday sets a negative tone for the opening in Asia on Monday, a stark reminder that investors are still much more likely to sell in bags of strong assets into riskier assets at this point. push them higher.

August’s Purchasing Managers Index (PMI) reports from Australia, Japan, China and India could amplify or alleviate the general feeling of gloom, but the US shutdown last week suggests some relief may be fleeting.

US markets are closed for the Labor Day holiday, so liquidity will be lower than usual, while European markets will process news that Russia has lifted a Saturday deadline to resume flows through a major gas supply route to Germany.

The impact of the European energy crisis on global financial markets cannot be ignored.

It wasn’t meant to be after Friday’s nonfarm payroll report outlined a “Goldilocks” scenario of the US job market for the Fed — slowing but still solid job growth and cooling inflationary pressures from slowing earnings growth.

But stocks failed to hold onto early gains despite the decline in bond yields, implied interest rates and the dollar.

The dollar will be closely watched after hitting a 24-year high against the yen above yen 140.00 on Friday. Japanese Finance Minister Shunichi Suzuki said G7 finance leaders did not discuss FX on Friday, but stressed that sharp moves in exchange rates are undesirable.

Meanwhile, tensions between the US and China continue to erode regional sentiment. The State Department announced on Friday a potential $1.1 billion sale of military equipment to Taiwan, a move that, according to the Chinese embassy in Washington, will “damage China-U.S. relations and peace and stability in the Taiwan Strait.” seriously endangers”.

Overall a challenging environment for the Asian markets on Monday.

Key developments that should give the markets more direction on Monday:

Australian Services, Composite PMIs (Aug, Final)

Japanese Services, Composite PMIs (Aug, Final)

China Caixin Services PMI (Aug)

India services PMI (Aug)

South Korean Foreign Exchange Reserves (Aug)

Reporting by Jamie McGeever in Orlando, Florida; Editing by Lisa Shumaker

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