Asian stock markets saw a modest uptick as investors reacted to weak US employment data, which has intensified speculation about potential Federal Reserve rate cuts. The news comes amid ongoing discussions about the US government shutdown and its impact on economic indicators.

Employment Data Sparks Rate Cut Expectations

Recent private-sector employment data has revealed a concerning trend in the US job market:

This data has had a significant impact on financial markets:

• The 10-year Treasury yield decreased by four basis points to 4.08%.
• Money markets are now pricing in approximately a 70% chance of a rate reduction next month.
• The likelihood of a quarter-point rate cut at the Fed's December meeting has increased, according to most economists.

Market Reactions

The employment data has triggered various responses across different market segments:

• US Treasuries: Prices rose in response to the weak jobs data.
• Asian Shares: Edged higher, benefiting from the increased likelihood of Fed rate cuts.
• Technology Stocks: Experienced a decline, with Nvidia falling 3% after SoftBank sold its entire stake in the chipmaker.
• SoftBank: The Japanese conglomerate's stock dropped as much as 10% in Tokyo trading.

US Government Shutdown Impact

The ongoing US government shutdown has amplified the significance of private employment data for investors. However, there may be a resolution on the horizon:

• The Senate has passed a temporary funding bill.
• The House of Representatives is set to consider the spending package.

This development could potentially end the shutdown, providing more clarity for economic data collection and analysis in the coming weeks.

As the markets digest this information, investors will likely keep a close eye on upcoming economic indicators and Federal Reserve communications for further clues about the direction of monetary policy.

Standard Chartered Bank's optimistic outlook on global markets, particularly the US economy, has caught the attention of investors worldwide. Fook Hien Yap, a representative from the bank, recently shared insights that paint a promising picture for the coming years.

US Economic Outlook

Standard Chartered Bank has assigned a 60% probability to a US soft landing scenario, indicating a positive outlook for the world's largest economy. This optimism is largely based on the Federal Reserve's anticipated rate-cut cycle, which the bank believes may support a smoother economic transition.

Federal Reserve Rate Projections

The bank's projections for the Federal Reserve's monetary policy are as follows:

Earnings Outlook

Standard Chartered's analysis reveals an improving earnings consensus:

This represents a significant improvement from earlier projections, which were below 11% for 2025.

Investment Positioning

Standard Chartered has taken the following positions in various asset classes:

The bank has set a 12-month target for gold at $2,500.00, reflecting a bullish stance on the precious metal.

Regional Preferences

In the Asia ex-Japan region, Standard Chartered has highlighted two key markets:

1. China: Preferred market due to improved valuations and policy support.
2. India: Remains a core allocation despite a negative earnings outlook.

Risk Assessment

While the overall outlook is positive, Standard Chartered acknowledges potential risks:

• 20% probability of a recession
• Close monitoring of labor market weakness

This balanced approach demonstrates the bank's commitment to thorough analysis and risk management in its market outlook.

As global markets continue to evolve, investors would do well to keep these insights in mind while making their investment decisions. However, it's crucial to remember that market conditions can change rapidly, and professional advice should be sought for personalized investment strategies.