Hang Seng Index, Nikkei Index, ASX 200: China Imports Impact the Hang Seng

Investor Caution Surfaces Ahead of the US Jobs Report

Overnight US economic indicators from Thursday (June 6) did not solidify investor bets on a September Fed rate cut.

US initial jobless claims increased from 221k to 229k in the week ending June 1. Economists expected initial jobless claims to be 220k. Despite the weaker-than-expected ADP private payrolls and jobless claims, investor expectations of a September Fed rate cut softened.

According to the CME FedWatch Tool, the chances of the Fed standing pat in September increased from 30.6% to 32.2%.

US Treasuries broke a five-day losing streak, rising by 0.28% on Thursday. Investor uncertainty surrounding the US Jobs Report impacted market risk sentiment.

The Nasdaq Composite Index and the S&P 500 fell by 0.09% and 0.02%, respectively. However, the Dow bucked the trend, advancing by 0.20%.

On Friday (June 7), the Nasdaq mini rose 23 points, with the Dow mini advancing by 51 points.

While investors should consider the US Jobs Report, the Asian economic calendar also required consideration.

Trade data from China failed to impress. Exports increased 7.6% year-on-year in May after rising 1.5% in April. However, imports rose 1.8% after increasing 8.4% in May.

Economists forecast Chinese imports and exports to grow 4.2% and 6.0% year-on-year. The better-than-expected export figures aligned with recent private sector PMI. In May, the Caixin Manufacturing PMI signaled an upward trend in demand from overseas. However, the weaker-than-expected import figures painted an uncertain outlook.

Hang Seng Index Tracks the Mainland China Markets into the Red

The mainland China indexes entered negative territory early in the Friday session. The Shenzhen Composite Index fell 0.91%, with the CSI 300 dropping by 0.53%.

The Hang Seng Index declined by 0.50% on Friday as investors reacted to the trade data from China.

Tech stocks trended lower, while real estate stocks saw early gains. The Hang Seng Tech Index (HSTECH) fell 1.60%, while the Hang Seng Mainland Properties Index (HSMPI) rose by 0.40%.

Baidu (9888) and Alibaba (9988) saw gains of 0.32% and 0.19%, respectively. Tencent Holdings (0700) bucked the trend, falling by 1.19%.

Nikkei Sees Red on Stronger Yen and Jobs Report Angst

The Nikkei Index fell 0.25% on Friday morning. A USD/JPY drop below 156 influenced buyer appetite for Nikkei Index-listed export stocks.

However, weaker-than-expected household spending numbers from Japan challenged investor expectations of a 2024 Bank of Japan rate hike. Household spending unexpectedly fell by 1.2% in April after rising 1.2% in March.

Sony Group Corporation (6758) slid by 1.18%. KDDI Corp. (9433) and Tokyo Electron Ltd. (8035) saw losses of 0.96% and 0.81%, respectively. Softbank Group Corp (9984) fell by 0.64%.

Fast Retailing Co. Ltd. (9983) bucked the trend, gaining 0.25%.

ASX 200 Tracks the US Markets into Positive Territory

The ASX 200 gained 0.22% on Friday morning, tracking overnight gains from the Dow.

Upward Thursday trends in gold spot (XAU/USD), iron ore spot, and WTI crude oil contributed to the gains.

Fortescue Metals Group Ltd. (FMG) and BHP Group Ltd (BHP) were up 1.14% and 1.14%, respectively. Rio Tinto Group Ltd. (RIO) gained 0.86%.

Gold stocks Northern Star Resources Ltd. (NST) declined by 0.21%, while Evolution Mining Ltd (EVN) rallied by 1.65%.

Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) increased by 0.72% and 0.66%, respectively.

However, bank stocks limited the upside through the morning session.

Westpac Banking Corp. (WBC) was down 0.69%, with ANZ Group Holdings Ltd. (ANZ) falling by 0.45%. Commonwealth Bank of Australia (CBA) and National Australia Bank Ltd. (NAB) were down 0.37% and 0.09%, respectively.

For upcoming economic events, refer to our economic calendar.