Asian equities opened cautiously ahead of US jobs data that may help clarify the path ahead for Federal Reserve interest rate cuts.
A gauge of regional stocks edged up 0.1%. Shares in Hong Kong and China fluctuated after Donald Trump held a call with China’s President Xi Jinping and agreed to further trade talks. Treasuries were steady after dropping in the prior session. An index of the dollar dipped 0.1%, hovering around levels last seen about two years back.
Investors have refrained from making big bets ahead of the key jobs report, which may provide clues on whether the Fed will be able to meet market expectations for two interest rate cuts in 2025. Traders are also paying attention to impact from the Xi-Trump call. Without providing much details, Trump said talks would begin shortly at a location to be determined as the countries aimed to resolve disputes over tariffs and rare earth minerals.
“The Trump-Xi call felt more like a lukewarm gesture to keep the line open than a sign of real progress,” said Hebe Chen, an analyst at Vantage Markets in Melbourne. “What’s striking is the timing — coming swiftly after Trump’s tweet, it suggests China is holding its spot at the table but on increasingly fragile terms.”
Later Friday, nonfarm US payroll growth probably decelerated to 125,000 last month after handily beating expectations for a second month in April, according to the median estimate in a Bloomberg survey of economists.
The report from the Bureau of Labor Statistics is expected to show that the labor market is generally holding up in the face of mounting uncertainty driven by Trump’s on-and-off tariffs.
“Anything below the 100,000 mark could reignite recession fears while a stronger-than-expected print could perversely be negative for risk assets as it would likely put upward pressure on yields,” said Julien Lafargue, chief market strategist at Barclays Private Bank.
On trade, Trump acknowledged Thursday the relationship with China had gotten “a little off track” but said now “we’re in very good shape with China and the trade deal.” Additional negotiations, Trump said, would occur “shortly” at “a location to be determined.”
Whether the call will unlock lasting trade peace, and crucially, shipments of critical minerals needed by US companies, remains to be seen.
“Markets are watching closely for any signs of de-escalation,” said Billy Leung, investment strategist at Global X ETFs in Sydney. “In my view, though, this feels more like noise than a genuine clearing event.”
Meanwhile, Tesla Inc.’s shares slumped 14% on Thursday as Trump proposed ending Elon Musk’s government contracts and subsidies after his onetime adviser attacked the Republican’s tax-policy bill.
Musk also called for Trump’s impeachment. The billionaire tweeted he won’t decomission Space Exploration Technologies Corp.’s Dragon spacecraft, after earlier saying he would end its use.
Separately, the Treasury Department declined to name any country a currency manipulator while singling China out for “its lack of transparency,” in a semiannual foreign-exchange report released Thursday. The last time the Treasury designated a country as a manipulator was in 2019, in Trump’s first term, when China got hit with the label. The tag was dropped five months later as a bilateral trade deal was negotiated.
In corporate news, Chinese ride-hailing leader Didi Global Inc. returned to profit in the March quarter, according to Thursday results, in a boost for the company as it gears up for a potential Hong Kong market debut. Elsewhere, Chinese officials summoned the heads of major electric vehicle makers, including BYD Co., to Beijing earlier this week to address concerns about the long-running price war, according to people familiar with the matter.
In Asia, data set for release Friday includes an interest rate decision in India.
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