Both Australian and Japanese stock markets decreased on Monday after American jobs report contributed to uncertainty regarding the Fed’s pace of interest-rate hikes.
Japan’s benchmark dubbed Nikkei Stock Average as well as Australian S&P/ASX 200 dipped 0.2%. Most Asian markets were closed for the Lunar New Year holiday.
On Friday, American data demonstrated slower job growth and decent wage inflation. Undoubtedly, it makes the Fed’s policy outlook more difficult. The pace of American tightening has been a huge concern since the Fed increased rates in December.
As a general manager for economic research of Daiwa SB Investments, Soichiro Monji states, the Fed’s increasing rates in March can’t be the major scenario, though it’s still possible.
China’s slowing growth, recent abrupt sags in crude oil prices, not to mention the meltdown of the energy industry and oil-producers have also been big concerns for investors.
The greenback as well as short-term US government bonds grew on Friday, thus factoring a bigger probability of an extra rate hike.
After years of central bank stimulus, which helped to lift commodities and stocks, the Fed’s policy path may narrow. Additionally, the sharper pickup in wage growth could help the central bank to increase rates in the nearer future just to cool down economic activity.