Asia Market Quick Take – 05 February, 2026

Asia Market Quick Take – 05 February, 2026

Key points:

• Macro: US private sector adds 22k jobs after at 37k revision downwards
• Equities:Tech underperformed; Eli Lilly’s surge 10% after earnings
• FX: USD strengthened; JPY weakens on anticipated Japanese election outcome
• Commodities: Oil slips for first time in three sessions; gold back above $5,000
• Fixed income: Treasuries mixed; curve twist-steepens around steady 7Y

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Disclaimer: Past performance does not indicate future performance.

Macro: 

• US private businesses added 22K jobs in January, led by health care with 74K. Medium-sized firms gained 37K jobs, while large employers lost 18K. Professional services dropped 57K jobs, and manufacturing fell 8K. Job creation slowed in 2025 to 398K from 771K in 2024, with stable wage growth, per ADP's Dr. Nela Richardson.US private businesses added 22K jobs, led by health care with 74K. Medium-sized firms gained 37K jobs, while large employers lost 18K. Professional services dropped 57K jobs, and manufacturing fell 8K. Job creation slowed in 2025 to 398K from 771K in 2024, with stable wage growth, per ADP's Dr. Nela Richardson.
• Trump and President Xi discussed trade, military, and Trump's China visit in a call. Xi stressed positive US relations and caution on Taiwan. VP Vance proposed a critical minerals trade bloc, and USTR Greer will detail the agreement.
• US ISM Services PMI stayed at 53.8 in January 2026, beating the 53.5 forecast. Business activity grew, but new orders, employment, and supplier deliveries slowed. Inventories and backlogs contracted, while price pressures increased. ISM's Steve Miller noted tariff impacts and geopolitical tensions affecting pricing.
• The S&P Global Canada Composite PMI dropped to 46.4, below the neutral 50.0 for a third month. Services declined to 45.8, driving the slump, while manufacturing stabilized. New business fell for the 14th month, affecting output. Employment saw a slight decline, and business confidence weakened. Input cost inflation eased, but output charges remained steady.
• US Services PMI increased to 52.7 in January 2026 from 52.5, marking three years of growth. Domestic sales offset tariff-related foreign softness and marginally increased employment. Higher payroll costs and tariffs raised input inflation. Business confidence dipped to a three-month low.
• Tehran will engage in talks with Washington on Friday in Oman, easing concerns over oil disruptions. Iran seeks to focus on nuclear issues, while the US wants to also address missiles, regional militancy, and human rights.

Equities:

• US - S&P 500 slipped 0.3% while the Nasdaq fell 1.6%. Semiconductor selling accelerated after AMD dropped 17% on a weak outlook, dragging Micron, Broadcom, Lam Research and Applied Materials sharply lower. Uber fell 5% after missing earnings estimates. Outside tech, defensives outperformed, with Amgen’s 8% earnings‑driven surge and Eli Lilly’s 10% rise after reports of strong Zepbound and Mounjaro saleslifting healthcare and helping the Dow rise 0.6%. After hours, Alphabet sales beat but stock fell up to 6% on much higher capex spending forecast. Qualcomm beat expectations but forecast weaker growth due to memory shortage
• EU - European equities were mixed Wednesday amid divergent corporate results. The STOXX 50 slipped 0.2% while the STOXX 600 edged up 0.2% to a record high. ASML fell nearly 5% following sector pressure from AMD’s results, though Infineon outperformed on strong earnings. Siemens dropped almost 8% after announcing a $1 billion US manufacturing investment. Santander fell 3.5% after earnings and its $12.2 billion Webster Bank acquisition. Novo Nordisk plunged 17% on a weak drug outlook, and UBS fell 6%. In contrast, Air Liquide and BASF gained on hopes of softer EU emissions rules, while banks rose as Eurozone inflation eased.
• HK -Hang Seng edged up to 26,847 on Wednesday, reversing early losses and extending gains for a second day after a private survey showed China’s services sector expanding at its fastest pace in three months ahead of Lunar New Year. Mainland markets also rose, led by defensives, as China’s top legislative body convened ahead of March’s key policy meetings. Hong Kong’s private sector grew for a sixth month and retail sales extended their recovery. CK Hutchison gained 2.1%, while China Resources Land, Pop Mart and Nongfu advanced. Tencent fell 3.7% and SMIC dropped 2.3% on AI‑related concerns.

Earnings this week:

• Thursday: ConocoPhillips, Amazon, Energizer, Strategy Blocks, Shell, Roblox, Reddit, Cigna, Estee Lauder, Affirm
• Friday: Centene, Canopy Growth, Cboe, Biogen, Nvent, Under Armour, Toyota

FX:

• USD strengthened against G10 currencies, with the DXY approaching Monday's high. Mixed data showed ISM Services exceeded forecasts, while ADP Employment fell short. Geopolitical focus intensified with uncertainty surrounding the US-Iran talks, which were alternately cancelled and rescheduled for Friday. 
• JPY fall past 156 against dollar as traders anticipate a Liberal Democratic Party win in Japan's election. This impacts caution ahead of a 30-year bond auction, with potential USDJPY fluctuations and intervention on February 11 discussed.
• EUR slightly weakened from lower-than-expected EU services PMI and softer core inflation with focus on Thursday's ECB meeting. 
• GBP faced mild pressure with limited catalysts before the BoE announcement disappointing services PMI, and UK PM Starmer's reported reshuffle plan. GBPUSD traded around 1.3650.Riksbank's minutes revealed President Thedeen's confidence in the current monetary policy, allowing minor data deviations without immediate adjustments.

Commodities:

• Oil retreated for the first time in three sessions after Iran confirmed talks with the US, easing the risk of strikes; WTI slipped toward $64 after a 4.8% two-day gain, Brent settled near $69 on Wednesday, and Foreign Minister Abbas Araghchi said the meeting will be in Oman on Friday.
• Gold rebounded above $5,000 an ounce as dip buyers stepped in after a historic plunge, with spot up as much as 1.2% in early trade and clawing back losses over the past two sessions; by Wednesday’s close it was still 11% below the 29 Jan peak but up 15% year to date, while silver crossed $90.

Fixed income:

• Treasuries finished mixed in a twist‑steepener centred on a near‑unchanged 7‑year sector after a status‑quo quarterly refunding, with USD swap spreads volatile then tighter as widener positions were unwound amid no signal of a meaningful weighted‑average‑maturity reduction; separately, Japan’s MoF will auction ~¥700bn Dec‑2055 notes (reopening the Jan‑2026 issue) and New Zealand Debt Management will sell a small 2054 tranche in a three‑tenor offering.

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