The central bank’s minutes didn’t offer a timetable on possible rate cuts
US stocks closed mostly lower on Thursday, with the S&P 500 notching a four-day losing streak. The index shed 0.34% during the session. The Nasdaq Composite finished 0.56% lower to lose nearly 4% since late December. Bucking the trend, the Dow Jones gained 0.03%. This week, market participants express uncertainty around when the Federal Reserve will begin to cut rates, especially as the minutes from the central bank’s latest monetary-policy meeting didn’t offer a timetable on possible reductions. Now, investor focus shifts to the December jobs report release due later in the day.
In Asia, equities were mixed and little changed on Friday as investors were cautious in anticipation of key US payrolls data. Meanwhile, persistent concerns over China added to indecisive tone among market players, with most regional markets closing lower for the week after Fitch downgraded the issuer default ratings of four Chinese national asset management companies. The Shanghai Composite index gave up 0.85% on Friday while Hong Kong’s Hang Seng index shed 0.7%. In Japan, the Nikkei 225 added 0.4% but lost 0.1% for the week.
European stocks opened lower on Friday as investors awaited key US payrolls data while the late drop in US stocks yesterday weighed on the mood as well. Thursday’s ADP private payrolls release added to evidence of labor market resilience. In the Eurozone, Germany’s December construction PMI came in at 37.0 versus 36.2 prior. Despite some improvement, this is still a very weak reading, suggesting the country’s construction sector remained deep in contraction territory to end the year.
In currencies, the US dollar resumed the ascent ahead of the weekend after some hesitation on Thursday. The USD index saw fresh mid-December highs around 102.77 earlier on Friday before retreating marginally. The greenback remains buoyed by risk aversion along with growing doubts over early Fed rate cuts. Should the upside momentum persist in the near term, the dollar may target the 103.00 figure last seen on December 13th. On the downside, the nearest support now arrives in the 102.35 area, followed by the 102.15 zone.