Asian Stock Market: Trades mixed as NFP week begins with OPEC+ surprise

• Asia-Pacific equities grind lower as OPEC+ output cut renew inflation fears.
• Downbeat manufacturing numbers from Japan, China also challenge sentiment amid firmer yields.
• Pre-NFP consolidation allows US Dollar to remain firmer, WTI rose past $81.00 before paring gains to 4.50% intraday run-up.

Market sentiment in the Asia-Pacific region remains mixed as traders struggle to cheer receding hawkish Fed bets amid fresh inflation fears emanating from the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, known as OPEC+. However, the mixed data at home and anxiety ahead of top-tier US jobs reports keep the buyers hopeful of late.

While portraying the mood, the MSCI’s index of Asia-Pacific shares outside Japan drops 0.60% intraday but Japan’s Nikkei 225 prints 0.50% intraday gains around 28,190 by the press time. On a broader front, the S&P 500 Futures snapped a three-day uptrend near the highest levels since mid-February while the US 10-year and two-year Treasury bond yields print mild gains near 3.52% and 4.11% respectively.

OPEC+ surprised markets by announcing 1.16 million barrels per day of output cut. The same renews inflation fears and allows the yields to pare recent losses. On the same line could be the downbeat China Caixin Manufacturing PMI and Japan’s Tankan Large Manufacturing Index for the first quarter (Q1) of 2023, a closely observed output guide by the Bank of Japan (BoJ), which eased to 1.0 from 7.0 previous readings and 3.0 expected.

With this, stocks in China join Indonesia’s IDX Composite, South Korea’s KOSPI and India’s BSE Sensex to print mild losses.

It’s worth noting that Australia’s TD Securities Inflation eased to 0.3% MoM and 5.7% YoY for March versus 0.4% and 6.3% respective priors, which in turn joins the previous week’s downbeat inflation and Retail Sales figures from the Pacific major to strengthen the dovish bias for the Reserve Bank of Australia’s (RBA) next move. As a result, Australia’s ASX prints mild gains of around 7,215 by the press time.

It’s worth noting that the shares in New Zealand remain downbeat as the latest New Zealand Institute of Economic Research (NZIER) report expects 0.25% rate hike to tame inflation woes.

Moving on, multiple top-tier central bank events and inflation numbers are up for publishing in the Asia-Pacific region during this week, which in turn can join Friday’s US jobs report to offer active days ahead.

Also read: S&P 500 Futures drop, yields grind higher as OPEC+ surprise renews inflation fears