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Asian stocks struggled on Wednesday as Wall Street cooled following the news that US job openings had hit a nearly two-year low in February. All three major US indexes closed down, and interest rate expectations were dialled back accordingly.
This had a ripple effect across markets, leaving MSCI’s Asia-Pacific index excluding Japan faring little better than flat. Japan’s Nikkei 225 had also fallen 1%. Stocks, meanwhile, were unable to make headway, the dollar nursed losses and bonds clung to gains.
Data showing weak US job opening indicated a possible slowing of the country’s labour market, raising concerns about the economic outlook. This led to two-year treasury yields dropping by almost 15 basis points, causing dollar to hit a two-month trough.
This, in addition to a larger-than-expected rate hike by the Reserve Bank of New Zealand lifting the kiwi dollar, saw the focus shift to other central banks like Europe’s. Currently, many foreign exchange strategists are expecting the dollar to remain subdued throughout the year.
The cheapening of the dollar drove gold prices upwards to a one-year high at over $2,000 per ounce. Markets largely expect that the Federal Reserve may have already finished raising rates. There is even a strong probability that the central bank will cut rates in 2019.
JPMorgan Chase & Co’s CEO, Jamie Dimon, commented that fears that have been rattling banks have yet to dissipate. Consequently, the market’s risk for a recession have heightened.
Japan’s manufacturing sector showed some improvement, with services activity rising to its highest since nine or more years in March. Meanwhile, China’s manufacturing sector is losing momentum but was counterbalanced by investment inflows reaching a record in the first quarter.
Other markets such as commodities also felt a ripple from the US news. It had an initial surge in oil prices following news of unexpected production cuts from OPEC+ nations. The overall impact saw Brent crude prices staying steady at $85.42 a barrel.
JPMorgan Chase & Co is a multinational investment bank and financial services company headquartered in New York. It is a leader in corporate and investment banking, financial services for consumers, commercial banking, and asset management. JPMorgan Chase & Co is one of the “Big Four” US investment banks, alongside Goldman Sachs.
Jamie Dimon is the CEO and chairman of the board of JPMorgan Chase & Co. He is one of the world’s most powerful bankers, having successively held leadership roles in other finance industries like Citigroup Inc and The Seagram Company Ltd. Dimon is a strong advocate of financial education, believing that access to accurate information is key in helping people make informed financial decisions.
