Asian markets declined sharply Monday, led by Australian and Hong Kong shares, as robust U.S. payroll data dampened hopes for imminent Federal Reserve rate cuts. Trading volumes in the region were lighter due to Japan’s market holiday.
Hong Kong’s Hang Seng index dropped significantly, while China’s CSI 300 and Shanghai Composite posted modest losses. Despite better-than-expected December trade data from China, markets saw no boost. In Australia, the S&P/ASX 200 fell 1.4%, although Insignia Financial Ltd surged nearly 3% following an improved buyout offer from Bain Capital.
Friday’s U.S. jobs report revealed surprising strength, with accelerated job growth and a lower unemployment rate, suggesting the Federal Reserve may maintain current interest rates. The Fed, which cut rates by 100 basis points in 2024, now projects fewer reductions in 2025, given persistent inflation and economic resilience.
ING analysts noted, “Strong U.S. jobs data bolsters the likelihood of an extended pause from the Fed, especially in an inflationary environment.” Goldman Sachs has revised its outlook, expecting only two rate cuts this year instead of three.
Elsewhere in Asia, the Philippines’ PSEi Composite fell over 1%, Singapore’s Straits Times Index slid 0.3%, and South Korea’s KOSPI declined 1% amid domestic political tensions.
Markets are bracing for key U.S. data releases this week, including inflation, retail sales, and industrial production figures. China will also announce critical economic indicators, including GDP growth, industrial production, and retail sales, providing insights into its economic health.
With a busy week ahead, global investors are closely monitoring data to gauge economic momentum and future monetary policy directions.


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