21/11/2025 - 08:40 UTCThe USDX, is trading slightly lower near 100.15 during the Asian trading hours on Friday, consolidating after an advance of 0.10% higher on Thursday. The previous day's movement was driven by the release of delayed US jobs data, which showed a mixed picture that failed to provide clear direction for the Federal Reserve's policy path.
Data from the Bureau of Labor Statistics (BLS) on Thursday indicated that the US economy created more jobs than expected in September. However, the report also revealed a concerning rise in the Unemployment Rate and contained downward adjustments to figures from preceding months. This uncertainty complicates the US Federal Reserve's decision-making process as it considers whether to lower interest rates next month to support the labor market.
Despite the mixed data, cautious remarks from Federal Reserve officials may help limit the dollar's losses. Cleveland Fed President Beth Hammack on Thursday reaffirmed her stance against further rate cuts, citing concerns over current price levels. Meanwhile, Philadelphia Fed President Anna Paulson stated on Friday that she is approaching December’s policy meeting "cautiously," emphasizing that the central bank must carefully balance slowing labor momentum against lingering inflation risks.
On the geopolitical front, Ukrainian President Volodymyr Zelenskyy confirmed he will negotiate with President Donald Trump concerning the US-backed 28-point peace plan, which calls for painful concessions by Ukraine to end the Russian invasion. While this development keeps geopolitical risks in play, it has failed to support commodity markets, as both Gold and WTI crude oil futures are seen trading more than 1% lower early on Friday.
Most Asian indices moved sharply lower on Friday, driven by a broad sell-off in technology shares. Market sentiment turned sour following a weak lead from the main US equity indices, which declined overnight, as persistent fears over stretched Artificial Intelligence (AI) valuations were amplified by a cooler reception to bellwether Nvidia Corp's recent earnings. Regionally, markets were also grappling with the implications of strong US jobs data, which further reduced the likelihood of a December interest rate cut by the Federal Reserve, weighing heavily on risk-driven assets. As of 07:45 AM GMT Friday, the Hong Kong 50 index was down -2.59%.
China SSE and China SZSE saw declines in today's session, with both mainland Chinese indices moving lower. Focus remained on a worsening diplomatic dispute between China and Japan over comments made regarding Taiwan.
The Japan 225 index was down -0.4% as of 07:45 AM GMT Friday, pressured by data showing consumer inflation increased as expected in October, with underlying inflation pushing further above the Bank of Japan’s 2% annual target. Sticky inflation gives the BOJ more reason to hike interest rates, with a small majority of investors expecting a December hike, even as the government prepares a massive fiscal stimulus package to support growth.
The main US equity indices moved sharply lower overnight as investors turned negative on Nvidia and dumped tech shares. Broader sectors also declined after stronger-than-expected nonfarm payrolls data spurred further pricing out of expectations for a December interest rate cut by the Federal Reserve. The USDX saw upward movement. S&P 500 Futures later rose, signaling a potential attempt at recovery.
The technology sell-off hit key stocks exposed to the AI trade. By the end of their last trading sessions, Nvidia Corporation was down -3.17%, Samsung Electronics Co Ltd fell -6.12%, SK Hynix Inc plummeted -8.72%, and major supplier TSMC slid -4.79% in Taipei trade. These sharp drops occurred despite Nvidia beating market expectations, as investor concerns over the company’s increasing inventory and questions over its financing of key clients persisted, keeping fears over stretched AI valuations squarely in play.
The EUR/USD pair was almost unchanged on Thursday before edging higher in the Asian session on Friday, trading near 1.1540. The pair's movement is currently driven by increasing bets for a Federal Reserve (Fed) rate cut in December, following the release of mixed US jobs data. The CME FedWatch Tool now suggests markets are pricing in a 36% chance of a 25 basis point rate cut next month, up from 30% a day prior.
Meanwhile, the Euro's position remains steady, supported by cautious comments from European Central Bank (ECB) official Gabriel Makhlouf, who stated on Thursday that the current monetary policy is appropriate and adjustments are unlikely unless a significant change occurs. Traders are now awaiting preliminary Purchasing Managers Index (PMI) data from Germany and the Eurozone.
Going forward, traders now await the preliminary reading of the US S&P Global Purchasing Managers Index (PMI) later on Friday for more cues. Further guidance is expected from upcoming speeches by influential FOMC members, as markets search for clues on the direction of potential rate cuts.
Gold (XAU/USD) retreated on Thursday and continues to move lower early Friday, erasing earlier gains that had pushed the metal above the $4,100 level. The immediate pressure on Gold stems from the release of the US September jobs report, which showed mixed but generally stronger-than-expected data, leading to a firmer dollar.
The US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) for September significantly exceeded expectations, registering 119K gains against forecasts of 50K. However, the Unemployment Rate edged up from 4.3% to 4.4%. This mixed picture initially spurred a rally in Gold prices, but the advance quickly reversed course.
The reversal was cemented by renewed hawkish commentary from Federal Reserve officials. Cleveland Fed President Beth Hammack and Fed Governor Michael Barr warned that inflation remains elevated (at 3%) and that easing monetary policy prematurely could encourage financial risk-taking and prolong high inflation.
While US Treasury yields are diving, the strength of the dollar and the hawkish Fed commentary are weighing heavily on the non-yielding metal. The minutes from the October FOMC meeting showed that "many participants" opposed reducing the federal funds rate in December, despite current market odds for a rate cut having edged up slightly to 39%.
Oil prices fell on Friday, extending declines for a third straight session, as the United States pushed for a Russia-Ukraine peace deal that could increase global market supply. This potential development, combined with prevailing uncertainty over future US interest rate cuts curbing investor risk appetite, weighed heavily on prices.
On Thursday, the two primary crude oil benchmarks, WTI, and Brent, moved -1.74% and -0.83% respectively. Market sentiment has turned bearish as Washington pushes for a peace plan to end the three-year war, while sanctions on top Russian oil producers Rosneft and Lukoil are also scheduled to take effect. Analysts note that an end to the conflict could potentially swell global supply, though skepticism remains about how soon a final peace deal can be struck.
A stronger dollar, amidst weaker US stocks, also contributed to depressing oil prices, making the dollar-denominated commodity more expensive for international buyers.
The main US equity indices moved lower on Thursday, reversing earlier gains. The decline was attributed to the cooling rally in Nvidia stock and diminishing expectations for a Federal Reserve rate cut in December, driven by mixed economic signals. The S&P 500 gave up its earlier momentum, while the Dow Jones Industrial Average and the NASDAQ Composite also slipped.
Data released earlier showed the US economy added 119,000 jobs in September, exceeding the 50,000 forecast for Nonfarm Payrolls. However, the report was mixed: the Unemployment Rate rose to 4.4% (a four-year high), and the August payroll figure was revised lower. This mixed data, released after being delayed by the government shutdown, adds to uncertainty ahead of the December FOMC meeting. Since the next official jobs report is postponed until December 16, the Federal Reserve will lack complete labor data for its December 10 policy meeting, empowering both sides of the rate action debate.
Despite reporting blowout earnings and guidance for the third quarter, Nvidia stock gave up its early gains as fears about overstretched valuations in the AI sector resurfaced. These concerns were amplified by public warnings, including from Bridgewater founder Ray Dalio, about a potential AI bubble forming. The stock had been sharply higher after the company flagged stellar demand for its chips, with CEO Jensen Huang pushing back against valuation concerns by noting that AI-driven demand is set to broaden beyond data centers and hyperscalers.
Investors are now turning their attention to new earnings reports, with retail giant Walmart being a key highlight.
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