"The trend higher in jobless claims clearly shows a slowing in the labour market and plays to views of a U.S. recession in 2023," said National Australia Bank's head of market economics, Tapas Strickland. The U.S. Leading Economic Index, a gauge of future economic activity, also dropped to its lowest level since November 2020 overnight and it is signalling a recession starting mid-2023. U.S. futures were flat after Thursday's drop with heavy selling on weak results. Tesla, which dropped nearly 10% on Thursday as its margins were squeezed, raised some U.S. model prices a bit on its website even though it has been making cuts lately. The slowdown signals have also weighed on the U.S. dollar as traders bet on some 50 bps in U.S. rate cuts this year -- though in a quiet Asia session the dollar steadied. The euro is lingering near last week's one-year high at $1.0971. The yen rose slightly to 133.84 to the dollar. The Aussie and New Zealand dollars made small losses.
JAPAN VALUE
The Japanese market was a notable outlier in the region,
with the Nikkei touching an eight-month high and on
track for a second consecutive weekly gain.
Corporate governance in Japan has suddenly become a cause
celebre and seems to be rousing the world's third-largest stock
market out of decades of lethargy.
"The value trade has been working," said Puneet Singh,
director of quantitative research at Societe Generale in
Singapore.
"If you're buying value in Japan, if I'm looking at
(price-to-earnings) and just buy the cheap P/E names, that’s it,
you’ve outperformed the market."
Shares of Rakuten Bank jumped as much as 40% on
debut, as investors snapped up the downsized listing.
Japan's consumer inflation held steady above the central
bank's target in March, data showed on Friday, keeping alive
market bets that the Bank of Japan could phase out its policy of
enormous bond buying to pin down government bond yields.
Yields in Japan were broadly steady on Friday, eschewing the
lead from the U.S. overnight. The BOJ meets next week. "It looks like market participants have taken positions in
preparation for policy changes ahead of the meeting," said
Nomura strategist Naka Matsuzawa, though he expects no change.
"We think that changes at the June meeting are now more
likely, as long as financial unrest in the U.S. and Europe does
not flare up again."
Elsewhere the mood dragged on bitcoin , which is
back below $30,000, while the fall in yields has gold ,
which pays no income, straddling $2,000 an ounce.
In commodity markets traders are closely watching for
producers' and buyers' response to Chilean plans to nationalise
the lithium industry. Chile holds the world's largest reserves.
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World FX rates YTD Global asset performance Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Editing by Shri Navaratnam and Sonali Paul)
