SYDNEY — Asian shares were mostly downbeat on Monday as profit-taking hit some high-flying Japanese tech groups, though China remained well supported by optimism over its home-grown AI ventures.
A holiday in the US made for thin trading, with Wall Street and European share futures managing minor gains after retreating on Friday.
The dollar and bonds were under some pressure ahead of a busy week for US data which includes surveys of manufacturing and services, and a range of labour numbers culminating in the August payrolls report on Friday.
Median forecasts are for an increase of 75,000, though estimates range widely from zero to +110,000 due to the uncertainty caused by July’s surprisingly weak report, while the jobless rate is seen ticking up to 4.3 percent.
Analysts also cautioned the August report has shown a bias to undershoot forecasts over the past decade. A result in line or softer would cement market expectations for the Federal Reserve to cut rates at its meeting on September 17, which futures imply is a near 90 percent probability.
“Although inflation and growth data don’t scream out for a rate cut, at this stage it would likely require a significant positive employment surprise to stop the Fed from moving forward, given their concern about the sharp recent deceleration in job growth,” said Michael Feroli, chief US economist at JPMorgan.
The prospect of lower borrowing costs has underpinned Wall Street near record highs, and would be timely given September has been the worst performing month of the year for the S&P 500 over the past 35 years.
S&P 500 futures and Nasdaq futures both dipped 0.1 percent. EUROSTOXX 50 futures firmed 0.1 percent, while FTSE futures were flat and DAX futures gained 0.1 percent.
