Signage for Hong Kong Exchanges and Clearing Ltd at the Hong Kong Stock Exchange in Hong Kong, China, on Tuesday, Sept. 17, 2024. (Photo: Lam Yik /Bloomberg via Getty Images) 
A gauge of Hong Kong-listed Chinese companies dropped as much as 3.8%, halting a 13-day rally that was fueled by optimism over measures to stimulate the economy. Stocks in Australia were flat as were US equity futures after benchmarks closed little changed Wednesday. Equities in Mainland China and South Korean are shut for holidays. Oil gained for a third day amid tensions in the Middle East.
“Clients are still questioning the effectiveness of Beijing’s stimulus measures,” said Sonija Li, an analyst at MIB Securities Hong Kong Ltd. “After the recent rally, now people are asking how much upside there remains. Surprisingly, there’s not much interest in the China property sector.”
Japan’s Topix index advanced more than 1% after new prime minister Shigeru Ishiba said the economy isn’t ready for another interest-rate increase, weakening the currency. The yen fell to a more than one-month low against the dollar, extending its 2% decline Wednesday.
Renewed vigour in the dollar added to the pressure on the yen as stronger-than-expected ADP jobs data led traders to pare bets on aggressive Federal Reserve rate cuts. Swaps traders were pencilling in some 33 basis points of policy easing at the central bank’s November meeting, down from 44 basis points just last week.
Oil rallies
Oil rose as investors awaited Israel’s response to Iran’s missile attack, with US President Joe Biden urging Israel to hold off from attacking Iran’s nuclear facilities.
Bloomberg’s dollar index rose for a fourth day, bolstered by rising Treasury yields. The US 10-year yield rose one basis point to 3.79% in Asian trade after jumping five basis points in New York amid the flare-up in Middle-East tensions.
Data Wednesday showed US companies added more jobs than economists forecast last month, at odds with other indicators that show a cooling labour market. Friday’s nonfarm payrolls numbers will be the next critical reading on the health of workers and the US economy.
The “ADP employment number surprised to the upside, suggesting the labour market is bending but not breaking,” said Chris Larkin at E*Trade from Morgan Stanley. “Friday’s monthly jobs report will have the final word on the current jobs picture, and more than likely, on near-term market sentiment.”
US jobs
The US nonfarm payroll report won’t take a half a percentage point cut off the table, according to Bank of America Corp. strategists led by Meghan Swiber. “Even if the labour market surprises to the strong side, pricing will still maintain optionality,” they wrote.
To Marc Rowan, the chief executive officer of Apollo Global Management Inc., the Fed’s aggressive policy easing threatens to overstimulate the economy.
“It is not clear we need more rate cuts,” he said in an interview with Bloomberg Television, pointing to ready financing and rising real estate prices.
Richmond Fed president Thomas Barkin said it was too early for the central bank to declare victory over rising prices. “While we have made real progress — there remains significant uncertainty on both inflation and employment,” he said.