news/AMZN/2023.02.03/Asian stocks pull back, dollar regains footing ahead of U.S. payrolls data.txt

*Asian stock markets: https://tmsnrt.rs/2zpUAr4*China shares fall, Japan's Nikkei up 0.3%*Sentiment hurt by weak earnings from U.S. tech giants*Sterling, euro falter after BOE, ECB signal pause*European yields sharply lower, Treasury flat ahead of
payrollsSYDNEY, Feb 3 (Reuters) - A global stock rally ran into
resistance in Asia on Friday as disappointing earnings from U.S.
tech giants undermined sentiment, while the dollar regained some
of its footing ahead of a key U.S. non-farm payrolls report.European markets are set to extend the caution, with
pan-region Euro Stoxx 50 futures down 0.1%, German DAX
futures falling 0.2%, and FTSE futures mostly
flat.Overnight, markets took a dovish view on rate guidance from
the European Central Bank and the Bank of England, hoping that
an end of the massive global tightening cycle is in sight,
pushing local bonds higher and the currencies lower.MSCI's broadest index of Asia-Pacific shares outside Japan
eased 0.6% on Friday, dragged down by a 1.3%
slump in Chinese blue-chips and a 1.4% tumble in Hong
Kong's Hang Seng index.Investors are waiting to see more tangible signs of an
economic recovery in China, after Beijing dropped nearly all of
its COVID curbs in December, sparking a surge in foreign
inflows.Other regional markets eked out modest gains. Japan's Nikkei
rose 0.3%, Australia's resources heavy shares
rallied 0.6% and South Korea's KOSPI climbed 0.5%.Disappointment over earnings results from Google,
Apple and Amazon tempered sentiment, with the
S&P 500 futures sliding 0.5% and Nasdaq futures
falling 1.5% on Friday.Tech shares took a beating in Thursday's after-hours
trading, with shares of Apple down 3.2%, Amazon down 5% and
Google parent Alphabet down 4.6%.Apple projected another revenue decline in the start of the
year, Amazon warned that its operating profit could fall to zero
in the current quarter, and Google parent Alphabet missed
expectations in its fourth-quarter profit and revenue.That took the shine off a strong regular trading session on
Thursday, when the S&P climbed 1.5% and the Nasdaq
surged 3.3%. The uptick built on strong gains from the
previous day after Federal Reserve Chair Jerome Powell said
disinflationary pressures are underway in the economy, raising
hopes that a pause to its monetary tightening streak is near.Investors are also watching the fallout from this week's
plunge in shares of India's Adani group, which continued to
nosedive on Friday with market losses amounting to $115 billion
in the wake of a U.S. short-seller's report.On Thursday, the European Central bank (ECB) and Bank of
England (BoE) hiked rates by 50 basis points each, with the BoE
saying the tide was turning against inflation and the ECB
indicating at least one more hike was on the horizon before
re-evaluating its rate hike path.Markets reacted by pushing European yields sharply lower,
with the 10-year German bunds falling 22.6 basis
points to 2.065%, the biggest drop since 2011, and Italian bonds
tumbling 40 bps to 3.887%, the most since 2020."The wash-up is that the BoE meeting was dovish, and the ECB
is now firmly open-minded and data-dependent, and the Fed chose
not to fight the market and the market feels validated by that,"
said Chris Weston, head of research at Pepperstone.Alan Ruskin, macro strategist at Deutsche Bank, said that
given the current market price action ahead of the U.S. payrolls
data, a softer report would be regarded as endorsing all the
favourite trades of the year."Not least it would provide the most important evidence to
date to suggest that the market's rates pricing is more
appropriate than the Fed's own more hawkish signalling," said
Ruskin.Analysts expect 185,000 jobs were added last month, the
lowest since January 2021, unemployment edged up to 3.6%, and
hourly wage inflation to stay flat at 0.3% on a monthly basis,
suggesting the strong labour market might have started to ease
up.Futures markets still favour another 25-basis-point hike
from the Fed at its March policy meeting, while implying that
might be the end of its current tightening cycle. They have also
priced in one rate cut by the end of this year, a scenario
Powell dismissed.In the currency markets, the euro extended
losses to $1.0889, pulling further away from the ten-month top
of $1.1033 touched on Thursday.Sterling fell to $1.2213 on Friday, the lowest
in more than two weeks, after tumbling 1.2% the previous
session.That helped the U.S. dollar to recoup most of its
post-Fed losses, with the dollar index now standing at
101.85, away from its nine-month low of 100.80.Treasury yields held largely steady. The yield on
benchmark 10-year Treasury notes eased 2 basis
points to 3.3726%, while the two-year yield, which
rises with traders' expectations of higher Fed fund rates, was
mostly flat at 4.0918%.In the oil market, Brent crude futures reversed
earlier gains and slid 0.2% to $82.01 per barrel, while U.S.
West Texas Intermediate (WTI) crude was also down 0.2% at
$75.70.Gold was 0.2% higher. Spot gold was traded at
$1915.66 per ounce.(Editing by Shri Navaratnam and Kim Coghill)