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Stocks Prices Fall as the Dollar’s Gauge Moves Close to Record High

The stock markets in Asia have seen a sharp fall in the early hours of Friday while the US Dollar’s gauge is moving to a new high level. These come up while the markets await the release of the high-level US jobs report that might trigger an expectation for an interest rate jump from the US Federal Reserve.

Early Stock Shocks

An Asian-wide stock market index dropped over 0.5% of its value as it reacted to a pullback in tech company shares in China. Futures in the United States were also in the red zone while contracts in Europe dropped a bit of their advance. Wall Street, then, broke a losing streak it had been on for the past four days and posted average gains.

The US jobs report expected to be published on Friday will show the payrolls increase and it models the stronger manufacturing index. The market is increasingly expecting a 75 basis points interest rate increases from the Federal Reserve to tame inflation.

It is against the expected rate increase that the 2-year Treasury yield rose to near its highest level since 2007. Whereas the Dollar index stepped back but maintained its position to be seen at Thursday’s level, the Euro also gained a little strength.

However, bonds throughout the world fell to a bearish market for the first time in about a generation. Bloomberg’s global index of investment and government bonds dropped by over 20% from the peak it struck in 2021.

Not Time for Bullishness

The measurement of the global stock market is getting ready to witness its worst period since last June. It is surrounded by decreasing bets of a reduced monetary policy tightening from the Federal Reserve following recent announcements from different Fed officials. 

A strategist with JPMorgan, Meera Pandit, said that there are not many reasons for bullishness in the current kind of market for the next few weeks and months to come. She said further that thinking about investors and perspective in the long term is what can be beneficial in the long term.

The expected jobs report coming later on Friday will reveal a gain of 298,000 and a wage increase. The President of the Atlanta Fed Reserve, Raphael Bostic, said there is work to be done to rein in the high price pressure.

The energy crisis much of Europe is facing is another source of concern in the market. It seems Russia is ready to resume its supply to the relief of investors but there are fears that another supply cut might come up.

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