Asian stocks poised to track Wall Street declines

Along with a slew of corporate sales, there’s been renewed concern about longer-dated global debt after years of issuance exacerbated budget deficits. In the UK, the yield on long-dated bonds hit the highest since 1998 and the pound sank as pressure mounted on Prime Minister Keir Starmer to manage the budget.

Long bonds are under real pressure from poor deficit and debt metrics in many countries and, in the US, from Fed-related concerns, according to Nomura.

“A breach of 5% on the US 30-year will likely further increase the focus on these issues,” said Andrew Ticehurst, a Nomura Holdings Inc. strategist in Sydney.

In Asia, Taiwan Semiconductor Manufacturing Co. will be in focus after the US revoked the company’s authorization to freely ship essential gear to its main Chinese chipmaking base. TSMC’s US-listed American depositary receipts slipped as much as 2.3% Tuesday.

Meanwhile, US President Donald Trump said his administration would ask the Supreme Court for an expedited ruling in hopes of overturning a federal court decision that many of his tariffs were illegally imposed. “The stock market’s down because the stock market needs the tariffs. They want the tariffs,” the president said.

Traders will be looking to key US labor market data this week for clues on economic growth and the Fed’s policy outlook. Employers showed little enthusiasm to take on workers during August, and the unemployment rate probably ticked up to an almost four-year high, adding to evidence of a more subdued jobs market.

The importance of this week’s economic data will ultimately drive where yields are by Friday’s close – even if there is a lot that could shift investors’ perception of the state of the labor market in the interim,” said Ian Lyngen and Vail Hartman at BMO Capital Markets.

On the economic front, US factory activity shrank in August for a sixth straight month, driven by a pullback in production that shows manufacturing remains bogged down by higher import duties.

“The ISM manufacturing report indicated that companies are largely managing headcount rather than actively hiring,” said Scott Helfstein at Global X. “This may be a clue ahead of Friday’s jobs numbers. New jobs are likely slowing, but meaningful revisions to data over the prior months could mean that the report, good or bad, may not influence investors much.”

Helfstein said investors should pay close attention to wage growth in Friday’s job report.

“Wages have been outpacing inflation and that is usually a good sign for consumption,” he said. “While defaults are going up slightly, most of the numbers on consumer behavior have remained robust.”