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Shares in Australia and South Korea both fell from the open, pressuring a gauge of the region’s shares that’s now declined for four consecutive sessions. US equity futures also edged lower after the S&P 500 slipped 1.5% Friday. Japanese markets are closed Monday, which means there’s no trading in cash Treasuries in Asian hours.
The better-than-expected US payroll data affirmed the case for Federal Reserve officials to keep interest rates on hold for the foreseeable future, in the face of lingering inflation and political uncertainty. That gave the dollar a boost Friday, while pushing up US Treasury yields.
Global crude benchmark Brent advanced above $81 a barrel, after surging almost 4% in the previous session. The US imposed its most aggressive and ambitious sanctions yet on Russia’s oil industry on Friday, targeting two large exporters, insurance companies, and more than 150 tankers.
Australian and New Zealand bonds dropped early Monday, following last week’s Treasury declines. Bloomberg’s gauge of the dollar held near a two-year high, while the yen edged lower.
Options traders are preparing for the pound to tumble as much as 8% more as fiscal woes that prompted a painful selloff across UK markets last week weigh on the currency.
In Asia, data set for release Monday includes December trade data for China and inflation for India. Separate figures on China’s December money supply may also be released at any time through January 15.
Economic data for China will offer investors further evidence of the challenges facing the world’s second largest economy. Chinese stocks are facing their worst start to a year since 2016 after falling more than 5% in the first seven trading sessions of 2025.
Strong Jobs
Investors will shift their focus to signs of US inflation in data to be released this week, with the consumer price index report released on Wednesday. They’ll also be watching the New York Fed’s one-year inflation expectations due Monday, producer prices on Tuesday and jobless claims on Thursday.
The data will provide further clarity on the US economy after Friday’s nonfarm payroll figures. US employment in December advanced by the most in nine months and the unemployment rate unexpectedly fell, capping another year of resilience in the labor market. The data supported the idea US rates may stay put for the foreseeable future, a prospect suggested by a handful of Fed officials over the past week.
Following Friday’s jobs data, economists at some big banks revised their forecasts for additional Fed rate cuts.
Bank of America Corp., which previously expected two quarter-point reductions this year, no longer expects any, and said there’s a risk the next move is a hike. Citigroup Inc. — whose rate-cut outlook is among Wall Street’s most hopeful — still looks for five quarter-point cuts, but says they’ll start in May. Goldman Sachs Group Inc. sees two cuts this year versus three.
In corporate news, Johnson & Johnson is exploring a bid to acquire Intra-Cellular Therapies Inc., people familiar with the matter said. Bain Capital sweetened its bid for Australia’s Insignia Financial Ltd. as takeover activity heats up for the wealth manager.
Also Read: Trade Setup for January 13: Nifty may see further pain post US market sell-off on Friday
