Markets Await Critical U.S. Jobs Report Amid Liquidity Crunch

Asian share markets were subdued on Monday as investors anticipated a U.S. jobs report, which could influence whether the Federal Reserve opts for a standard or larger rate cut this month. Political uncertainties in Germany and thin liquidity due to holidays in the U.S. and Canada also added to market caution.

Asian share markets remained subdued on Monday as investors braced for a data-heavy week culminating in a U.S. jobs report, potentially determining the magnitude of an anticipated rate cut by the Federal Reserve. The lack of liquidity, owing to holidays in the United States and Canada, alongside political uncertainties from far-right victories in German state elections, further complicated market sentiment.

The dollar steadied after Friday's robust spending figures, with markets partially discounting the likelihood of a half-point Federal Reserve easing. Futures now fully anticipate a 25-basis point cut on Sept. 18, with additional cuts projected through to 2025. Similarly, the Bank of Canada is poised for another rate cut on Wednesday, though a consensus on the extent remains elusive.

This week's economic indicators, including the ISM surveys, JOLTS job openings, ADP employment figures, trade data, and the Fed's Beige Book will be crucial. Investor caution led to minor retreats in S&P 500 and Nasdaq futures, while Asian markets showed mixed performance. European markets remained flat, reflecting ongoing apprehension over the upcoming fiscal data and geopolitical tensions.

(With inputs from agencies.)