Global Market Volatility Ahead of US Data Reports

Investors are eyeing the U.S. ISM manufacturing survey for cues on interest rate cuts, as recent data has steadied the dollar. Expectations are mixed, with some anticipating rate adjustments. In Asia, economic indicators show growth opportunities, while company news and geopolitical developments also shape market dynamics.

Global markets are bracing for possible volatility as investors keenly await today's U.S. ISM manufacturing survey—an early indicator in a crucial week for U.S. data and the dollar.

The Federal Reserve and investors are seeking signals for interest rate cuts, with current forecasts tempering expectations for a 50-basis-point reduction this month. Despite this, recent economic signals have helped stabilize the dollar after a two-month downturn. Economists project the ISM manufacturing index at 47.5, a slight improvement but still below the 50-mark indicating contraction. The labor market is also expected to add 160,000 jobs, with unemployment decreasing to 4.2%.

Lower-than-expected figures could push the dollar to test recent lows. In contrast, Asian markets have seen cautious gains, influenced by optimism surrounding U.S. rate cuts that could allow local economies to implement their own easing policies to stimulate growth. Data from Australia and South Korea further bolstered this outlook, with increased government spending and reduced inflation respectively paving the way for rate cuts.

Meanwhile, corporate moves such as Cathay Pacific's Airbus A350 flight cancellations due to engine inspections and Japan's Seven & i Holdings resisting a buyout bid add layers of complexity to market expectations. Key market influencers this Tuesday include the U.S. ISM manufacturing PMI.

(With inputs from agencies.)