BANGKOK — On Friday, European stocks began the day with modest gains, while markets across Asia saw a decline following the closure of U.S. markets in observance of a National Day of Mourning for former President Jimmy Carter.
Germany’s DAX index remained steady at 20,316.29, whereas the CAC 40 in Paris dipped slightly by 0.1% to 7,486.82. London’s FTSE also recorded a minor decline, dropping 0.1% to 8,312.55.
Futures for the S&P 500 decreased by 0.4%, and those for the Dow Jones Industrial Average were down by 0.3%. Analysts noted that the overall downturn in Asian markets may signal a growing concern over the Federal Reserve’s potential interest rate adjustments, following unexpected positive data related to the U.S. economy.
Minutes from a recent Federal Reserve meeting, dated December 17-18, indicated that officials are likely to slow the pace of interest rate cuts throughout the year, in light of persistent inflation and potential policy shifts under President-elect Donald Trump, including increased tariffs.
Tan Jing Yi from Mizuho Bank commented on the situation, indicating that market participants are increasingly worried that the Federal Reserve may maintain stricter monetary policies, which might not support a robust risk-taking environment.
Investors are particularly cautious as uncertainties loom regarding Trump’s tariff strategies towards China and other nations ahead of his inauguration on January 20. A report from ANZ Research highlighted the assurance of raised tariffs on Chinese imports but expressed uncertainty regarding which other economies might be affected and whether broader tariffs could be introduced.
Market participants were also awaiting a significant U.S. non-farm payroll report that was scheduled to be released later in the day.
In Tokyo, the Nikkei 225 index plummeted by 1.1%, settling at 39,190.40, while South Korea’s Kospi experienced a smaller decline of 0.2%, reaching 2,515.78. Chinese equity markets continued their downward trend, with Hong Kong’s Hang Seng down 0.9% at 19,064.29 and the Shanghai Composite index falling by 1.3% to 3,168.52.
In Australia, the S&P/ASX 200 lost 0.4%, closing at 8,294.10. Conversely, Thailand’s SET gained 0.3%, though India’s Sensex dipped by 0.3%, with Taiwan’s Taiex also slightly falling by 0.3%.
Meanwhile, in the U.S., the bond market remained operational until its recommended closure at 2 p.m. Eastern time on Thursday, maintaining overall stability in yields despite the recent volatility in the stock market. The yield on the 10-year Treasury note was recorded at 4.69%, having recently approached 4.70%, the highest since April; this figure was notably lower than 3.65% in September.
Higher yields tend to adversely affect stock prices by increasing borrowing costs for companies and consumers, alongside attracting some investors towards bonds. These yields have risen as favorable economic reports from the U.S. exceeded economists’ expectations, compounded by concerns of inflationary pressures arising from Trump’s proposed fiscal strategies.
Additionally, early Friday trading saw U.S. benchmark crude oil prices climb by $1.12, reaching $75.04 per barrel, while Brent crude, the global standard, increased by $1.14 to $78.06 per barrel.
The value of the U.S. dollar decreased to 157.68 Japanese yen, down from 158.14 yen, while the euro experienced a slight uptick to $1.0303 from $1.0301.
