Asian Equities Set to Advance Amid Mixed US Data, Falling Yields

Asian markets are poised for gains on Thursday, tracking positive momentum in US stocks and bonds after a turbulent week marked by tariffs, lackluster tech earnings, and uneven economic data.

Equity Markets

Equity futures for Japan, Australia, and Hong Kong are all trending higher. The S&P 500 and Nasdaq 100 extended their rebound on Wednesday, with the Nasdaq 100 notching its second consecutive day of advances.

Bond Markets

US Treasuries rallied across the yield curve on Wednesday. The 10-year yield dropped nine basis points to 4.42%, while the policy-sensitive two-year yield declined to 4.18%. Both yields are now at their lowest levels since mid-December. Australian yields also fell early on Thursday.

Currency Markets

Lower yields have weighed on the US dollar. An index of greenback strength fell 0.2% to its lowest level in a week, erasing gains fueled by Donald Trump's tariff announcements last week.

Economic Data

Services sector activity in the US softened in January, according to data released Wednesday. The ISM survey showed a reading of 52.8, down from 54 in December. This suggests that economic growth could moderate in coming months.

However, separate data indicated strong hiring in January, with companies adding more jobs than expected. This comes ahead of Friday's closely watched nonfarm payrolls report.

Precious Metals

Gold touched a record high amid concerns over market tightness, while US oil prices fell over 2% on Wednesday.

Other Markets

* Australian trade balance figures and inflation data for Vietnam and Thailand are scheduled for release.
* The Bank of Japan's Naoki Tamura is set to speak later on Thursday.
* The Bank of England is expected to cut interest rates by 25 basis points to 4.5%.
* China has requested WTO talks with the US following the imposition of tariffs on Chinese imports.

US Stocks

US stock markets gained on Wednesday despite a significant drop in Alphabet Inc.'s shares after disappointing earnings. The tech bellwether's decline weighed on the "Magnificent Seven."

Other notable moves in US stocks included:

* Advanced Micro Devices Inc. fell 6.3% on a weak outlook.
* Qualcomm Inc. jumped on a bullish sales forecast.
* Arm Holdings Plc provided a tepid earnings estimate.
* Ford Motor Co. warned of potential profit declines.
* Nvidia Corp. rose but remains below its record levels.

Key Risks

Jim Chanos, a noted short seller, cautioned that unpredictable events pose the greatest risks to US markets in the next six to 12 months. He cited the example of DeepSeek's AI threat, which wiped billions off Nvidia's market capitalization.

Key Events

* Eurozone retail sales (Thursday)
* UK interest rate decision (Thursday)
* US initial jobless claims (Thursday)
* Fed speakers: Christopher Waller, Lorie Logan (Thursday)
* Amazon earnings (Thursday)
* US nonfarm payrolls, unemployment rate, University of Michigan consumer sentiment (Friday)
* Fed speakers: Michelle Bowman, Adriana Kugler (Friday)