SYDNEY- Asian share markets were mixed on Monday as risk assets found support from the upbeat US October payrolls report, but faced another test later in the week from a reading on US inflation that could spook the rate horses.
The congressional passage of a long-delayed US $1 trillion infrastructure bill cheered investors, though a broader social safety net plan remains elusive.
Data out over the weekend also showed China’s exports beat forecasts in October to deliver a record trade surplus, although a miss on imports added to evidence of a slowing in domestic demand.
Moves were modest with MSCI’s broadest index of Asia-Pacific shares outside Japan off 0.2 percent. Japan’s Nikkei lost early gains to dip 0.2 percent, short of a recent five-week peak.
Chinese blue chips dithered either side of flat, stuck in a range that has held for almost four months.
Nasdaq futures were off 0.4 percent, after 10 straight sessions of gains which left the index looking overextended. S&P 500 futures dipped 0.2 percent, while EUROSTOXX 50 futures eased 0.1 percent and FTSE futures were flat.
Friday’s robust US payrolls report included upward revisions to the previous couple of months and another strong reading on wages.
Tightness in the labor market combined with dislocation in global supply chains should result in another high reading for US consumer prices due on Wednesday, with any upside surprise likely to rekindle talk of an earlier Federal Reserve hike.
Analysts note an alternative measure of core trimmed mean inflation has already picked up markedly to an annual 3.6 percent.
“Another acceleration in the monthly annualized trimmed CPI will reinforce our view that the Fed is behind the curve,” said Kim Mundy, a senior economist & currency strategist at CBA.
