Headline: Asia-Pacific Markets Mixed: AUD Climbs on Jobs Data as AI Valuations Draw Scrutiny
Introduction: Asia-Pacific trading opened to a split tone as currency markets firmed while equities wobbled. The Australian dollar advanced on labor data, AI-linked shares faced valuation questions despite upbeat revenue outlooks, and oil prices eased as the US dollar strengthened.
AI and US macro backdrop: AI momentum remains strong, with AMD signaling expectations for AI-related revenue growth above 35%. Even so, investors are increasingly cautious that parts of the tech sector may be repricing toward dot-com-era extremes. Energy markets softened with oil prices edging lower, while the firmer US dollar underscored a risk-aware tone. In the US, the government shutdown has ended, but recent GDP growth slowed to 1.5% and operational disruptions have yet to fully clear. Treasury yields slipped and the Dow staged a 550-point rebound, though market participants warn that underlying risks have not disappeared.
Asia FX and equities: In Australia, the AUD pushed higher following October employment figures. Westpac noted that beneath the headline strength, the labor market appears to be gradually cooling—likely keeping the Reserve Bank of Australia focused on inflation rather than employment volatility. Equity sentiment was softer, with the ASX dipping as investors weighed rate risks and global growth signals. In China, analysts at Macquarie see scope for GDP to hold near 5% next year, citing resilient export demand. Exports rose an estimated 5% this year despite tariffs and are projected to gain about 6% in 2026, well ahead of subdued consensus expectations.
Crypto and rates: Bitcoin slipped roughly 1.1% during a period of limited data releases, with market-implied odds of a Federal Reserve rate cut easing to around 50%. The shift in rate expectations and a firmer dollar kept risk appetite in check across crypto and broader asset classes.
Key Points: – AMD targets AI revenue growth above 35%, but tech valuations are drawing comparison to prior bubbles. – Oil prices eased and the US dollar strengthened, signaling a more cautious risk tone. – Australian dollar rose on jobs data; ASX slipped as the RBA remains focused on inflation dynamics. – US government shutdown ended; GDP growth slowed to 1.5% and some disruptions persist. – China’s 2025 growth could hold near 5% on strong exports, with 2026 export growth projected around 6%. – Bitcoin fell about 1.1% as Fed rate-cut odds retreated to near 50%, weighing on risk sentiment.
