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Published : 01 Sep 2025, 09:44 AM
Asian shares started the new month in the red on Monday after a court ruling threw another wrench into US tariff policy and investors braced for a reading on US jobs that could determine the course of rate cuts there.
A holiday in the United States made for thin conditions, though Wall Street and European futures were still trading with small gains after retreating on Friday.
The dollar and bonds were little moved ahead of a busy week for data which includes surveys of manufacturing and services, and a range of labour numbers culminating in the August payrolls report on Friday.
Median forecasts are for an increase of 75,000, though estimates range widely from zero to +110,000 due to the uncertainty caused by July's surprisingly weak report, while the jobless rate is seen ticking up to 4.3%.
Analysts also cautioned the August report has shown a bias to undershoot forecasts over the past decade. A result in-line or softer would cement market expectations for the Federal Reserve to cut rates at its meeting on September 17, which futures imply is a near 90% probability.
"Although inflation and growth data don't scream out for a rate cut, at this stage it would likely require a significant positive employment surprise to stop the Fed from moving forward, given their concern about the sharp recent deceleration in job growth," said Michael Feroli, chief US economist at JPMorgan.
The prospect of lower borrowing costs has underpinned Wall Street near record highs, and would be timely given September has been the worst performing month of the year for the S&P 500 over the past 35 years.
Early Monday, S&P 500 futures were up 0.2%, while Nasdaq futures added 0.3%. EUROSTOXX 50 futures firmed 0.3%, while FTSE futures rose 0.1% and DAX futures gained 0.3%.
Japan's Nikkei fell 0.9%, tracking a drop in US tech stocks on Friday, while South Korea's market slipped 0.5%.
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MSCI's broadest index of Asia-Pacific shares outside Japan inched down 0.1%, having hit a four-year high last week on the back of a bull run in Chinese stocks.
Trade uncertainty remained a drag after a US Court of Appeals ruled many of President Donald Trump's sweeping tariffs were illegal, but left them in place until mid-October awaiting an appeal to the Supreme Court.
six-tenths of a percent and the tech-heavy Nasdaq tumbling more than one percent.
The White House has other means to apply sectoral levies but it puts a question mark over trade agreements already reached or being negotiated. Talks with Japan have hit a stumbling block over rice, while negotiations with South Korea have bogged down.
"If the Supreme Court upholds the ruling, the Treasury would still need to return most of the now-close to $100 billion in additional customs duties collected over the past five months, and there is a danger that other countries would back-track on any preliminary agreements," noted Paul Ashworth, chief North America economist at Capital Economics.
Investors will also be wary of Trump's attacks on the independence of the Fed this week, with Fed Governor Lisa Cook set to file fresh arguments against her firing on Tuesday.
A confirmation hearing for Stephen Miran, Trump's pick for another Fed position, is scheduled for Thursday.
The political pressure for faster rate cuts has been a drag on the US dollar, which was pinned at 97.788 having shed 2.2% last month. The euro edged up 0.1% to $1.1697 , while the dollar held at 147.17 yen .
In commodity markets, gold has benefited from the dollar's decline and the outlook for lower rates to rise 2.2% last week. The metal was just off a four-month top at $3,444 an ounce .
Oil prices were on the defensive ahead of a planned increase in output from OPEC+ in coming months.
Brent dropped 0.2% to $67.35 a barrel, while UScrude eased 0.2% to $63.89 per barrel.
