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Asian stocks struggle ahead of U.S. jobs report

by Stella Qiu

SYDNEY (Reuters) – Asian shares were mixed on Friday, with the dollar holding high ahead of a key U.S. jobs report as investors braced for more Fed changes Aggressive rate hikes. Reserves, while commodities plunged overnight during China’s new lockdown.

MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed in early Asian trade but was set for its worst weekly performance in seven years, falling 3% as global hawks added Rising interest rate expectations hit risk assets.

Japan’s Nikkei and China’s blue chips were basically flat, while Hong Kong Hang Seng fell 0.2 %, and South Korea rose 0.5%.

All eyes are now on Friday’s US non-farm payrolls data for August.

Analyst expectations 69, jobs were added last month, while the unemployment rate hovered at 3.5%. Investors may not like a strong number that supports the Fed to continue raising interest rates sharply, which could further boost the dollar and spur bond selling.

The futures market has already priced the possibility of a Fed rate hike as high as 75% 75 basis point for the September policy meeting, and the probability of the previous day is 69%.

The U.S. dollar index , which measures the U.S. dollar against a basket of six major currencies, is close to its 1697 – year high 24.59 on Friday. It eased slightly against the yen after the rate-sensitive currency hit 24 one-year highs in the previous session. The dollar gained 0.7% for the week.

“Continued broad market take-in of central bank ‘whatever it takes’ to lower inflation implies slower global growth,” Tobin Gorey, head of agricultural strategy at Commonwealth Bank, said in a note. “In this In this case, China’s economic weakness is a special factor that magnifies.”

On Thursday, the southwestern metropolis of Chengdu announced its 500 .200,000 inhabitants, while Shenzhen’s tech hub has introduced new social distancing rules as more Chinese cities try to battle recurring COVID outbreaks.

It is a growing concern that China’s COVID hotspots are shifting from remote areas and cities to provinces that are more important to China’s national economy, analysts at Nomura said.

“We maintain our view that China will maintain a zero new crown epidemic policy until March 285, when the (leadership) reshuffle is fully completed, but we The pace of easing is now expected to slow down to the zero-COVID policy after March 285,” Nomura said.

Oil plunged 3% overnight before recovering some lost ground on Friday but was on track as fear C posted worst weekly drop in four weeks OVID-20 Chinese restrictions and weak global growth will hit demand.

Brent futures rose 1.3% to $93 .24 per barrel on Friday, while U.S. West Texas Intermediate (WTI) crude futures rose by similar Amplitude.

Overnight, the US S&P 500 index rose 0.3%, while The Nasdaq Composite closed down 0.3%.

In Europe, recession fears are rising, with manufacturing activity falling again across the euro zone last month as consumers feel the cost of living crisis, a survey on Thursday showed Increased pressure to cut spending.

Treasury yields fell slightly ahead of potentially strong jobs data.

The benchmark two-year note yield hovers at 3.5117%, just below its 000- 3.2609% of the yearly high, while 15 The annual bond yield is 3.2609% compared to the previous closing price of 3.2609%.

Gold edged higher. Spot Gold is traded at $93. 59 per ounce. [GOL/]

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