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(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.A powerful rally in U.S. and global stocks on Thursday, sparked by another slump in bond yields as investors cheer what they increasingly believe is the end of the global rate-hiking cycle, paves the way for a strong end to the week in Asia on Friday.There is a strong current of optimism surging through global markets that rate hikes from the Federal Reserve, Bank of England, European Central Bank and others are over.If the Fed delivered a ‘dovish’ pause on Wednesday, the BoE delivered a ‘hawkish’ pause on Thursday. But the over-arching reaction across markets was the same – huge rallies in bonds, stocks and risk assets.Investors are now looking to when the easing cycles start and how far they go. Around 70 to 75 basis points of Fed easing next year is priced into the U.S. curve, and almost 50 bps of expected rate cuts is reflected in the UK curve.Fed Chair Jerome Powell and other policymakers around the world may insist that policy needs to remain restrictive and that rate cuts are simply not on the agenda, but markets have the bit between their teeth – the pivot is in place.Bond yields slumped again on Thursday – the U.S. 10-year yield is down around 40 basis points from its peak above 5% only a few days ago – the dollar fell. That’s music to emerging market ears.Asian stocks jumped 1.7% for their best day since July. Given the strength of the rally on Wall Street and around the world later in the day, few would bet against another strong rise on Friday.The S&P 500 chalked up its best day in six months, also boosted by strong corporate earnings and guidance – Apple (NASDAQ:AAPL) reported forecast-beating quarterly sales and profit, although shares fell slightly in after hours trade.The three main Wall Street indexes are well on course to register their best week of the year, all eyeing weekly gains of around 5%.Japan’s Nikkei followed Wednesday’s 2.4% leap with a 1.1% spike on Thursday. Although the yen rebounded a bit Thursday, it is still below 150 per dollar near last year’s 33-year low and is languishing at its lowest level in over half a century on a real effective exchange rate basis.Chinese markets, however, remain the outliers. Official and unofficial figures this week showed manufacturing sector activity unexpectedly shrank in October, dampening the optimism that had built up after the strong third quarter GDP data.If the Caixin non-manufacturing purchasing managers report on Friday signals contraction in services – September’s 50.2 showed slender growth – Chinese stocks could buck the global trend and close lower on the day and the week.Here are key developments that could provide more direction to markets on Friday:- China, India services PMI (October)- Australia manufacturing, services PMIs (October)- Fed’s Barr, Barkin, Kashkari speak (By Jamie McGeever; Editing by Josie Kao) More

Monster, like industry leaders Coca-Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP), has seen demand hold up largely for its beverages, despite a string of price increases. The company has also seen costs of freight and aluminum cans come down from the pandemic highs, helping boost margins that had remained under pressure for a long time. Margins for the quarter ended Sept. 30 were up 53% from 51.3%, thanks to price hikes and easing costs of freight and aluminum cans. The company’s adjusted earnings of 41 cents per share beat market expectations by one cent.Net sales in the Monster Energy drinks segment, that also includes brands such as Reign Storm, rose 13.7%.However, net sales rose to $1.86 billion for the third quarter from $1.62 billion a year earlier, but slightly missed estimates of $1.87 billion, according to LSEG data. More

Australia’s prime minister Anthony Albanese embarks on a state visit to China this weekend that will underline a dramatic turnaround in relations between the countries, which had rapidly deteriorated in recent years over issues ranging from trade to security.Ties had reached a 50-year nadir, with Beijing imposing tariffs and sanctions on Australian goods and detaining Australian citizens, while officials in Canberra called for investigations into Chinese political influence and the origins of the Covid-19 pandemic.The Labor prime minister’s state visit marks the culmination of a recent rapprochement, driven by business weariness with trade tensions and a desire to depart from his predecessor’s more hostile stance.But Albanese faces the challenge of continuing to repair relations with Australia’s largest trading partner even as his administration forges closer security ties with the US to counter Beijing’s influence in the region.Richard Maude, senior fellow at the Asia Society Policy Institute, said the rapid thaw represented a surprising reversal from the “very, very deep lows of a few years ago” but would not undermine Australia’s co-operation with the US. “There is no shift in Australia’s position on Indo-Pacific security and its role in creating a balance of power,” he said.Albanese’s China trip, the first for an Australian prime minister since Malcolm Turnbull’s in 2016, comes on the heels of a visit to Washington last month. In a speech to top US officials, Albanese said Australia needed to be “clear-eyed” about its relationship with China, highlighting his government’s “patient, calibrated and deliberate” approach.His task will be to maintain that balance even as the Biden administration continues to increase pressure on China, imposing export controls on next-generation semiconductor equipment and strengthening security co-operation in Asia through alliances such as Aukus, which aims to give Canberra access to nuclear-powered submarines.US president Joe Biden, left, shares a toast with Australia’s prime minister Anthony Albanese during a state dinner in Washington last month More

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen on Thursday sought to reassure Asian countries that the U.S. approach to China would not lead to a ‘disastrous’ division of the global economy that would force them to take sides.In a speech ahead of the U.S.-hosted Asia Pacific Economic Cooperation Summit in San Francisco later this month, Yellen said that a full de-coupling of the U.S. and Chinese economies was “simply not practical,” especially given the complexity of Asian supply chains and the region’s deep economic ties to China.Her comments sought to assuage growing concerns about geopolitical fragmentation of the global economy into U.S.-led and China-led factions amid growing national security-driven export and technology controls between the world’s two largest economies.”A full separation of our economies, or an approach in which countries including those in the Indo-Pacific are forced to take sides, would have significant negative global repercussions,” Yellen said. “We have no interest in such a divided world and its disastrous effects.”Yellen said the U.S. instead was pursuing the “de-risking and diversifying” of its economic ties to China, by investing in manufacturing at home and by strengthening linkages with allies and partners around the world, including Indo-Pacific countries.Yellen said the U.S. would not compromise on national security actions, but aimed to keep them narrowly targeted, not for the purpose of “choking off growth in China.” Her remarks to an Asia Society event came as the U.S. is preparing to host leaders and other top officials from APEC countries in San Francisco from Nov. 11-17. The White House wants to schedule a meeting between U.S. President Joe Biden and Chinese President Xi Jinping alongside the summit. TRADE, INVESTMENT LINKSYellen said the Biden administration was committed to expanding trade and investment with Indo-Pacific countries, emphasizing the region’s strategic importance ahead of the APEC gathering.Deeper economic links with Indo-Pacific countries will help make U.S. supply chains more resilient and tap into a dynamic and growing market for U.S. exports, she said.”As we look toward APEC later this month, let me state unequivocally: Claims that America is turning away from the Indo-Pacific are wholly unfounded,” Yellen said in the excerpts. “We are deepening our economic ties across the region, with tremendous potential benefits for the U.S. economy and for the Indo-Pacific.”The Biden administration also has called a seventh negotiating round for its Indo-Pacific Economic Framework for Prosperity (IPEF) initiative next week in San Francisco, aimed at reaching some agreements in time for the APEC summit.IPEF, while far short of a traditional free trade agreement, is the Biden administration’s signature initiative to engage economically with Asian countries and provide them a trade and investment alternative to China.Yellen said deeper integration with Indo-Pacific countries would benefit the region and the U.S. She noted that U.S. two-way trade with the region reached a value of $2.28 trillion in 2022, up 25% since 2019, with the region taking nearly a quarter of U.S. exports.”The economic case for our expanding trade and investment is clear. The Indo-Pacific is a dynamic and rapidly growing region. As it grows, we gain a fast-expanding customer base for U.S. firms and workers,” Yellen said.SUPPLY CHAIN SECURITYPart of the reason for increased trade with the region has been the migration of U.S. supply chains away from China, a trend that started with tariffs imposed by former President Donald Trump in 2018 and accelerated since the COVID-19 pandemic.Yellen said economic engagement with Indo-Pacific countries, including Vietnam, is “crucial to bolstering our supply chain security” to avoid bottlenecks and shortages that occurred as the world emerged from the pandemic. She repeated her desire to diversify supply chains to countries in the region through “friend-shoring” or using trusted allies as sources of supply.”And achieving resilience through partnering with Indo-Pacific countries means gains for Indo-Pacific economies as well,” Yellen said. More

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Economists surveyed by Dow Jones are expecting Friday’s nonfarm payrolls report to show job growth of just 170,000 in October, down from 336,000 the previous month.
Though long-standing trends such as aggressive job switching and big wage gains now show signs of reversing, hiring is still strong, one staffing executive said.
A potentially important trend to watch Friday has been the hiring of part-time workers in recent months.

Now Hiring banner in window of FedEx Office storefront, Queens, New York.
Lindsey Nicholson | UCG | Universal Images Group | Getty Images

Apologies if you’ve heard this one before, but the jobs market is slowing down. No, really.
Aside from the long-standing calls for a recession to hit the U.S., the expectation for a hiring retreat is probably the most oft-heard — and, so far, incorrect — economic call of at least the last year.

True to form, the consensus Wall Street call is that the October nonfarm payrolls report, which the Labor Department is scheduled to release Friday at 8:30 a.m. ET, will show a sharp decline from September. Economists surveyed by Dow Jones are expecting growth of just 170,000, down from the shockingly high 336,000 the previous month and well below the 260,000 monthly average so far in 2023.
Don’t hold your breath looking for that big of a decline, said Amy Glaser, senior vice president at global staffing firm Adecco.
“This is going to be another surprising month. We’re still seeing resilience in the market,” Glaser said. “We’re still seeing a ton of positivity on the ground with our clients.”
Though long-standing trends such as aggressive job switching and big wage gains now show signs of reversing, hiring is still strong as employers look for incentives such as flexible work scheduling to bring in new talent, she added.
“Folks aren’t able to jump from one job to another and gain these huge, astronomical pay increases, which is good news for the employers,” Glaser said. “On the flip side, we’re seeing a return of the workforce … The folks coming off the bench are really going to make an impact over the upcoming months.”

Trends in labor force participation will be one metric worth watching closely when the report hits, as the participation rate is still half a percentage point below its pre-pandemic level. Here are a few more:
Average hourly earnings
Wages increased 4.2% from a year ago in September. That is expected to decrease to 4% for October. The earnings picture is an important component to inflation, and one policymakers will be viewing with a careful eye.
The Dow Jones estimate is for a 0.3% monthly gain, after rising 0.2% in September. Federal Reserve officials have said they don’t think wages have been the key driver of inflation, though Chair Jerome Powell said Wednesday that the labor market could emerge as a more significant factor ahead.
Full-time vs. part-time
“In recent months, firms are hiring relatively more part-timers, indicative of the uncertainty in near-term business conditions,” said Jeffrey Roach, chief economist at LPL Financial.
Indeed, a potentially important trend has been the hiring of part-time workers in recent months. Since June, their rolls have swelled by 1.16 million, according to Labor Department data. Conversely, full-time positions have dropped by 692,000.
“Employers are creating more part-time opportunities that are bringing in players off the bench,” Glaser said. “There’s still a bit of caution on the side of employers, and they’re choosing to open part-time roles in this wait-and-see mentality.”
The unemployment rate
While the rise in the jobless rate over past months has generally flown under the radar considering how historically low it is, the level actually is approaching a potential danger zone.
An economic premise known as Sahm’s Rule states that recessions happen when the unemployment rate’s three-month average runs half a percentage point above its 12-month low. The current rate of 3.8% is 0.4 percentage point above the recent low last seen in April.
“Most investors expect additional deterioration in the job market before we see a meaningful deceleration of inflation,” Roach said.
Strike impact
Close to half a million American workers have gone on strike in recent months. While a number of those high-profile stoppages have been resolved, some of the activity will show up in the October jobs report.
Specifically, the Bureau of Labor Statistics is estimating that about 30,000 striking United Auto Workers will subtract from last month’s count, posing potential downside risks for the report.
Homebase, which compiles widely watched high-frequency data on employment trends, said the jobs market generally is turning lower.
The firm’s database indicates that employees working declined 2.4% in October, computed on a seven-day average using January as the baseline. Hours worked, another important metric, fell 2%, Homebase said. More

Leesburg Animal Park in Northern Virginia has seen strong business at its Pumpkin Village festival this autumn. Even with rainy weekends and a jump in admission prices, families have been coming out to visit the petting zoo, ride on giant slides and zigzag through a hay-bale maze.Shirley Johnson, the park’s owner, had been nervous that demand might recede. Headlines were warning all year about impending recession as the Federal Reserve raised interest rates to cool growth and contain inflation. That downturn hasn’t happened, but the uncertainty and higher borrowing costs have influenced her investment plans.“You can’t stick your neck out quite as far as you could,” she said. The park has held off on an expansion of its gibbon pen, a big project that would have given the playful primates more space, but would have also required taking out a loan.The park’s experience is one example of a story playing out across the country. More than a year and half into the Fed’s campaign to cool the economy, higher borrowing costs are clearly weighing on business investment and some interest-rate-sensitive sectors, but consumers are spending at a much stronger clip than had been expected.To cover rising expenses, the park has raised ticket prices. So far, people are still coming.Erin Schaff/The New York TimesThat resilience has central bankers on watch. For now, they are pleased that the labor market and economic growth have held up even as inflation has come down substantially, and this week Fed officials chose to leave interest rates unchanged as they wait to see whether that can continue. But they are also looking for further evidence that their moves are working to restrain the economy.“Everyone has been very gratified to see that we’ve been able to achieve pretty significant progress on inflation without seeing the kind of increase in unemployment that is very typical” with interest rate increases, Jerome H. Powell, the Fed chair, said on Wednesday. “The same is true of growth.”But he said that economic growth, which is mainly powered by consumer spending, would most likely need to slow for inflation to fully return to a normal pace. It is now running at about 3.4 percent, still well above the Fed’s 2 percent goal.“What we do with demand is still going to be important,” he said.Surveying the economy reveals that the effects of the Fed’s rate moves are clear in some places, are mixed in others and have yet to make much of a dent elsewhere.What has the Fed done with interest rates?Starting in March last year, the Fed has raised its key rate, which is now set to a range of 5.25 to 5.5 percent. That is above the level that central bankers think is necessary to slow the economy over time.Higher Fed rates have also helped to push up longer-term borrowing costs in markets, sending mortgage rates to nearly 8 percent, a more than two-decade high.Despite that, growth remains a lot quicker than economists think is normal. The economy expanded at a 4.9 percent annualized rate from July through September, the Commerce Department reported last week. That has prompted a debate about whether the Fed’s policies are succeeding at cooling things down.While economists think higher borrowing costs are having an effect, policymakers are watching the data to get a sense of whether they are weighing on the economy enough to fully wrangle inflation.“There’s a question of calibration,” William English, a former Fed economist who is now at Yale, said of the higher rates. “But are they working? Sure.”The park has made some medium-size investments this year, like improving its camel enclosure.Erin Schaff/The New York TimesWhere are the effects of higher rates clear?Higher rates tend to dent stock prices: Higher borrowing costs hurt the outlook for corporate profits and prod investment funds toward higher returning interest-bearing securities like bonds. That effect has begun to show up, although markets have been volatile.The S&P 500 fell for three consecutive months, from August through October, which coincided with a rise in longer-term market rates. Stocks are off to a stronger start in November, as long-term yields have dipped in recent days.Higher rates have driven up the value of the dollar, which makes imports cheaper for local buyers and U.S. exports more expensive abroad, among other effects.And steeper borrowing costs slow business investment. For instance, investment in equipment has been negative for three of the past four quarters, which could be a sign of rate increases at work. Caterpillar, the maker of industrial equipment, spooked investors this week when it reported a shrinking order backlog.Where are the effects mixed?While the Fed’s rate moves have made it more expensive to borrow to buy a house or a car, both of those markets have had shortages recently — making it complicated to see the effects.Take cars. They were in painfully short supply for months during the pandemic, as supply chain problems collided with strong demand. Supply has returned, but now there is a hole in the used car market, since far fewer new cars than usual were sold in 2021 and 2022.Car buyers have pulled back in recent months, but pent-up demand means that sales have eased, not plummeted.“It’s been more resilient than we thought this year,” John Lawler, the chief financial officer at Ford Motor, said on a recent earnings call. He noted that vehicles now cost about 14 percent of a consumer’s monthly disposable income, up from 13 percent before the pandemic, and Ford expects a gradual return to normal over the next 12 to 18 months.The housing market is even more complex. Housing supply is limited, partly because people who have locked in low mortgage rates are now hesitant to sell. Given a dearth of older houses on the market, existing home sales are way down, but new home sales have stabilized and home prices are popping.Higher interest rates are weighing on business investment and interest rate-sensitive sectors. And zoos.Erin Schaff/The New York TimesWhere are the effects not showing up?If there’s one place where it’s tough to see higher rates biting, it’s the consumer sector.The job market has held up even as the Fed’s rate moves have weighed on some parts of the economy: Hiring has slowed on average this year compared with last year, but it remains quicker than what was normal before the pandemic. Wage gains have cooled, but are also faster than the pre-2020 pace.That has allowed Americans to keep shopping, even through price increases and fading government pandemic relief. Spending climbed faster in September than economists had expected.Strong consumption could be a concern for the Fed, if it lasts, because it could enable companies to keep raising prices to cover their own costs or protect profits without losing customers — which could keep inflation rising.Take the animal park. It has made some medium-size investments this year, like improving its camel enclosure. But those projects cost money, and day-to-day operations have become more expensive.To keep up, the business raised prices. They scrapped a cheaper child ticket for the Pumpkin Village. Ordinary weekday visits also cost more: $17.95 for adults, per the park’s website, up from $15.95 at the end of 2021.So far, consumers are still coming.“People just want to be outside,” Ms. Johnson said. “It’s good old-fashioned fun.” More