Asian shares experienced a decline, mirroring the trend on Wall Street, as oil prices dropped to a six-month low. Meanwhile, the global bond market received a boost from the fall in oil prices and a soft reading on the U.S. labor market.
European stock markets also showed caution ahead of their opening, with EUROSTOXX 50 futures and FTSE futures down by 0.6%. S&P 500 and Nasdaq futures remained relatively unchanged.
The Japanese yen strengthened against the dollar, and Bank of Japan Governor Kazuo Ueda suggested various options for interest rates once the central bank moves short-term borrowing costs out of negative territory.
MSCI’s Asia-Pacific shares index fell by 0.8%, contributing to a 1.9% decline so far in the month. Japan’s Nikkei fell by 1.7%.
On Wall Street, energy and tech stocks dragged indices lower, with the Dow Jones slipping by 0.2%, the S&P 500 losing 0.4%, and the Nasdaq Composite falling 0.6%.
There are concerns in the market about the possibility of a hard landing for the global economy next year. The recent movements in equity and bond markets suggest growing uncertainty.
U.S. private payrolls increased less than expected in November, indicating a gradual cooling of the American labor market. Traders are closely watching the weekly jobless claims data and the non-farm payroll report due on Friday.
The U.S. dollar hovered near a two-week high against major peers at 104.19, ahead of the non-farm payroll release on Friday.
Asian bonds followed the overnight moves in Treasuries, with Australian 10-year government bond yields hitting a 2.5-month low of 4.225%.
Oil prices steadied after a nearly 4% decline, reaching their lowest settlements since June. Brent crude futures edged up 0.6% to $74.72 a barrel, while U.S. West Texas Intermediate futures rose 0.6% to $69.78 a barrel.
Gold prices remained flat at $2,025.96 per ounce.