Stock markets in Asia are opening the week in a downward spiral following the turmoil in North Korea and strong job numbers from the US.
There was turmoil in the stock market and geopolitical turmoil in Asia on Monday morning. The North’s Korean Central News Agency reported that the country’s leader Kim Jong Un directed and supervised the country’s tactical nuclear operations from September 25 to October 9.
Last Tuesday, North Korea fired a ballistic missile at Japan. This should be a newly developed missile that was supposed to give a clear and powerful warning.
This, combined with surprisingly strong job numbers from the US ahead of the weekend, is driving down the most important indicators in the morning hours.
After 7.30 am, it looks like this in the Asian market:
- The Nikkei is down 0.71 percent
- The Hang Seng Index clearly decreased by 2.78 percent
- The S&P Asia50 Index is down 2.03 percent
- Shanghai Stock Exchange fell 0.75
Markets in Japan, Taiwan and South Korea are closed on Monday due to public holidays.
Meanwhile, a barrel of North Sea oil was trading for $97, an increase of 2.26 percent.
Rejection by number of jobs
Ahead of the weekend, there were surprisingly strong job numbers in the US, which led to an increase in interest rate concerns and a clear fall in Wall Street.
The job numbers showed that 263,000 new jobs were created outside of the US agricultural sector in September.
Wage growth held steady at 5 percent, analysts expected. Unemployment at the same time fell to 3.5 percent, while it was previously expected to remain stable at 3.7 percent.
A tight labor market is contributing to interest rate concerns. E24 economists now believe that the Fed will deliver another triple increase in interest rates in November.
At the close of trading on Wall Street, the Nasdaq was down 3.8 percent, while the broad S&P500 was down 2.8 percent. The Dow Jones Industrial Average fell 2.1 percent.
expectations and inflation
This week, there are big expectations associated with US inflation figures, which will be shown on Thursday. Inflation is expected to continue rising, and the main factor will be whether the US central bank chooses to raise interest rates further.
The International Monetary Fund will also present its forecasts on Thursday. The International Monetary Fund is expected to provide a bleak outlook.
Inflation figures will also be shown here at home. On Monday we will find out on the core inflation in the economy in September, now that Statistics Norway is introducing the Consumer Price Index.
Core inflation, which excludes electricity and tax changes, ended at 4.7 percent annually in August, thus rising more than a record 4.5 percent in July. This is Norges Bank’s preferred target for price growth.
There is an expectation that inflation will rise further, which the Norges Bank has also taken as the basis for its planned interest rate path.
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