Asian stocks have a cautious start, Bitcoin in focus

Asian shares started the week on a cautious note as investors braced for a barrage of US economic data amid continued uncertainty over the Federal Reserve’s policy path.Japan fell along with Australia, while South Korean shares rose. US stock index futures rose slightly. The yen held steady after Japan’s economy shrank for the first time in six quarters.

After weeks of limited data, investors will finally get new signals about the health of the U.S. economy as agencies begin releasing key indicators, including employment figures. Traders also face a mix of risks – from high valuations of AI-related stocks to renewed tensions in China-Japan relations, while risk appetite appeared to fade as Bitcoin hovered around $94,000, wiping out almost all of the year-to-date progress. “November has been a pretty shaky ride for stocks so far,” Shane Oliver, chief economist and head of investment strategy at AMP Ltd., wrote in a note to clients. “Equity markets remain at risk of a correction given high valuations, risks around US tariffs and the weakening US job market.”

A slew of Fed officials have expressed skepticism about the need for a December cut, or outright oppose it, less than a month after Chairman Jerome Powell warned that a December cut is far from a “done deal.”

Last week, futures traders cut the odds of a quarter-point rate cut in December to below 50%, as some Fed officials indicated such a move is far from certain. That short-term uncertainty has increased expected bond market volatility, which has hovered around a four-year low. “While there will be questions about data quality, market participants will respond to new information” and weigh the dollar, Commonwealth Bank of Australia strategists led by Joseph Capurso wrote in a note to clients. “We expect the September nonfarm payrolls report to underperform expectations of an increase of 50,000.” In commodities, oil started the week lower, while gold rose. The precious metal is up more than 50% this year, putting it on track for its best annual gain since 1979.

Bullion was trading around $4,100 an ounce on Monday after losing more than 2% in the previous session. Expectations for another rate cut were lowered last week as Fed officials showed little conviction for reducing borrowing costs. Lower interest rates generally make non-profitable precious metals more attractive to investors.

Attention is also paid to the cryptocurrency market. Just over a month after hitting an all-time high, Bitcoin erased the more than 30% gain recorded since the start of the year, as exuberance over the Trump administration’s pro-crypto stance fades.