Asian Stocks Drop, Oil Rises on Russia Sanctions: Markets Wrap

By Pune Media On Jan 13, 2025 25

(Bloomberg) — Stocks slipped in Asia following Friday’s strong US jobs data, while oil climbed to the highest level in more than four months as a fresh wave of US sanctions against Russia threatened to crimp supplies.

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Shares in Australia, Taiwan and South Korea all fell from the open, putting a gauge of regional shares on course for a fourth day of losses. US equity futures also edged lower after the S&P 500 fell 1.5% on Friday. Japanese markets are closed Monday, meaning there’s no trading in cash Treasuries in Asian hours.

Friday’s better-than-expected US payroll data further damped bets on Federal Reserve interest-rate cuts this year. That gave the dollar a boost Friday, with Bloomberg gauge of the greenback rising to a two-year high, and pushing up US Treasury yields.

The dollar is “kind of this magical beast at the moment,” and positioning is long, said Chris Weston, head of research at Pepperstone Group told Bloomberg Television. “It gives you that relative growth, that protection — some sort of hedge against tariff risk at least in the short term.”

Global crude benchmark Brent advanced above $81 a barrel, after surging almost 4% Friday. The US imposed its most aggressive and ambitious sanctions yet on Russia’s oil industry, targeting two large exporters, insurance companies, and more than 150 tankers.

Australian and New Zealand bonds dropped from the start of trade, following last week’s Treasury declines. US sovereign bonds slumped on Friday after the December payroll data, sending the 30-year yield above 5% for the first time in more than a year.

In Asia, data set for release Monday includes December trade figures for China and inflation for India. Separate figures on China’s December money supply may also be released at any time through January 15.

China’s economic numbers will offer investors further evidence of the challenges facing the world’s second largest economy. Chinese stocks are facing their worst start to a year since 2016 after falling more than 5% in the first seven trading sessions of 2025.

Strong Jobs

Investors will shift their focus to signs of US inflation in data to be released this week, with the consumer price index report released on Wednesday. They’ll also be watching the New York Fed’s one-year inflation expectations due Monday, producer prices on Tuesday and jobless claims on Thursday.

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Bank of America Corp., which previously expected two quarter-point reductions this year, said it no longer expects any Fed rate cuts this year, and said there’s a risk the next move is a hike. Citigroup Inc. — whose rate-cut outlook is among Wall Street’s most hopeful — still looks for five quarter-point cuts, but says they’ll start in May. Goldman Sachs Group Inc. sees two cuts this year versus three.

In corporate news, Johnson & Johnson is exploring a bid to acquire Intra-Cellular Therapies Inc., people familiar with the matter said. Bain Capital sweetened its bid for Australia’s Insignia Financial Ltd. as takeover activity heats up for the wealth manager.

Key events this week:

China trade, Monday
India CPI, Monday
ECB Chief Economist Philip Lane and Governing Council member Olli Rehn speak in Hong Kong, Monday
New York Fed President John Williams speaks, Tuesday
Bank of Japan Deputy Governor Ryozo Himino speaks, Tuesday
Eurozone industrial production, Wednesday
France CPI, Wednesday
UK CPI and US CPI, Wednesday
Chicago Fed President Austan Goolsbee, Minneapolis Fed President Neel Kashkari speak, Wednesday
Australia unemployment, Thursday
Germany CPI, Thursday
US initial jobless claims, retail sales, import prices, Thursday
Bank of America, Morgan Stanley earnings, Thursday
China GDP, property prices, retail sales, industrial production, Friday
Eurozone CPI, Friday
US housing starts, industrial production, Friday

Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.3% as of 10:39 a.m. Tokyo time
Nikkei 225 futures (OSE) fell 1.2%
Australia’s S&P/ASX 200 fell 1.3%
Hong Kong’s Hang Seng fell 1.4%
The Shanghai Composite fell 0.1%
Euro Stoxx 50 futures fell 0.2%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0240
The Japanese yen rose 0.1% to 157.50 per dollar
The offshore yuan rose 0.1% to 7.3532 per dollar

Cryptocurrencies

Bitcoin rose 0.6% to $94,914.9
Ether rose 0.7% to $3,289.35

Bonds

The yield on 10-year Treasuries advanced seven basis points to 4.76%
Japan’s 10-year yield advanced three basis points to 1.200%
Australia’s 10-year yield advanced 10 basis points to 4.65%

Commodities

West Texas Intermediate crude rose 1.9% to $78.03 a barrel
Spot gold fell 0.3% to $2,682.13 an ounce

This story was produced with the assistance of Bloomberg Automation.