Oct 04, 2019: Asian markets fluctuated Friday as investors tentatively await the release of key US jobs data later in the day, following a number of disappointing figures this week that fanned concerns about the world's top economy.

Having avoided for the past few years the growth slowdowns suffered in most other countries, a big miss on factory activity and private jobs creation indicated the United States is now feeling the effects of its long-running trade war with China.

On Thursday a measure of the crucial services sector came in at its lowest for three years, ramping up expectations the Federal Reserve will cut interest rates for a third time this year at its October meeting.

The latest data, while missing expectations, provided a lift to Wall Street — which had plunged more than one percent on Tuesday and Wednesday — as dealers bet on another reduction.

Expectations are high for such a move.

“A quicker slowing in economic activity will put another brick in the Fed's wall of worries about business confidence and investment and may trigger a significant policy response,” said Stephen Innes, Asia-Pacific market strategist at AxiTrader.

“Is bad news good news still? Indeed, that does appear to be the case after the markets fully priced in a Fed rate cut in October and priced in December, suggesting that it's monetary policy that continues to remain one of the essential drivers of investor sentiment.”

– Dollar weakens –

But OANDA senior market analyst Jeffrey Halley added that while markets “pricing in an almost 100 percent certainty” for a rate cut, the bank could hold its horses for now.

“With trade talks between the US and China restarting next week in Washington it would make complete sense (for the Fed) to see if any progress is made,” he said in a note.

In early trade Hong Kong dipped 0.1 percent and Sydney edged up 0.1 percent, Seoul and Taipei both added 0.3 percent and Wellington put on 0.8 percent.

Manila and Jakarta also edged up but Singapore slipped 0.3 percent and Tokyo went into the break 0.1 percent lower. Shanghai was closed for a holiday.

The prospect of lower rates weighed on the dollar, which was down against most higher-yielding, riskier currencies such as the South Korean won and Indonesian rupiah.

It was also off against the pound, despite uncertainty about the outlook for Britain's economy after Prime Minister Boris Johnson's latest Brexit plan failed to win over the EU, just weeks before the October 31 Brexit day.

Johnson has warned that he will withdraw without a deal if the two sides do not reach an agreement, which has fuelled concerns about a deep recession in the already stumbling British economy.

– Key figures around 0230 GMT –

• Tokyo – Nikkei 225: DOWN 0.1 percent at 21,321.99 (break)
• Hong Kong – Hang Seng: DOWN 0.1 percent at 26,076.96
• Shanghai – Composite: Closed for a public holiday
• Euro/dollar: UP at $1.0990 from $1.0969 at 2100 GMT
• Pound/dollar: UP at $1.2353 from $1.2340
• Dollar/yen: DOWN at 106.84 yen from 106.87 yen
• West Texas Intermediate: UP 21 cents at $52.66 per barrel
• Brent North Sea crude: UP 19 cents at $57.90 per barrel
• New York – Dow: UP 0.5 percent at 26,201.04 (close)
• London – FTSE 100: DOWN 0.6 percent at 7,077.64 (close)

AFP/APP

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