July 9, 2019: Most Asian markets extended losses Tuesday as investors re-evaluated the Federal Reserve's interest rate options following last week's strong US jobs report.
Traders globally ran for cover after the forecast-beating payrolls figures dealt a blow to hopes for a steep cut in borrowing costs, stopping in its tracks an equities rally and pushing the dollar higher.
The focus now turns to the release of minutes from the Fed's June policy meeting and the two-day congressional testimony of central bank boss Jerome Powell, while dealers continue to monitor developments in the China-US trade talks.
“The better-than-expected job rebound is forcing the market to rethink its pricing on the number of rate cuts,” said OANDA senior market analyst Alfonso Esparza.
“Three was the group-think forecast, now moving down to two, but always with an eye on the US-China trade war and its possible negative impact on US growth.”
The fading likelihood of a 50-basis-point cut in rates, as had widely been hoped, provided strong support to the dollar, which has held gains against the dollar and euro while pushing to a more than one-month high on the yen.
But while the weaker Japanese unit helped Tokyo's Nikkei to positive territory in the morning, most other markets were in the red.
AFP/APP
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