US equity futures staged only modest recovery after Thursday’s sell-off as a stronger-than-expected US payrolls report failed to revive bets on a December Fed rate cut (CME FedWatch cut probability ~35.6%), leaving futures down for November and vulnerable to upcoming US Services PMI and Fed speakers. FX risk is front and center: USD/JPY surged to 157.893 amid intervention concerns tied to Prime Minister Takaichi’s stimulus plans and BoJ uncertainty, while Japan’s data were mixed—exports +3.6% YoY, imports +0.7% YoY, services PMI 53.1 with rising price pressures—and a Reuters poll showed 53% of economists expect a December BoJ hike, supporting a scenario where BoJ/Fed policy divergence could sharply move the yen, trigger carry-trade unwinds and pressure US risk assets (recall the July 2024 sell-off when a BoJ surprise sent USD/JPY below 140). Short-term market direction will hinge on US macro prints and FOMC commentary; Asian-session E-mini moves were modestly positive (Dow +201, Nasdaq +77, S&P 500 +79) but futures remain below their 50-day EMA, signaling a bearish near-term bias.
US stock futures staged only a modest recovery in the Asian session on November 21 after Thursday’s sell‑off; E‑mini moves were limited (Dow Jones E‑mini +201, Nasdaq 100 E‑mini +77, S&P 500 E‑mini +79) and futures remain below their 50‑day EMA, signaling a bearish near‑term bias. Stronger‑than‑expected nonfarm payrolls pushed USD/JPY to 157.893 on November 20 and prevented a clear revival of bets on a December Fed cut—the CME FedWatch probability rose to 35.6% on November 20 from 30.1% on November 19 but is well below the 50.1% level seen on November 13. FX and Japan developments are central to market risk: intervention concerns tied to Prime Minister Sanae Takaichi’s fiscal stimulus plans, mixed Japanese data and BoJ uncertainty have driven USD/JPY into the intervention zone. Japan posted exports +3.6% YoY and imports +0.7% YoY in October, while the services PMI remained 53.1 with rising wage‑driven selling prices; a Reuters poll shows 53% of economists expect a December BoJ hike, creating a credible scenario for USD/JPY compression and carry‑trade unwinds. Near‑term market direction will hinge on the S&P Global US Services PMI (expected 54.6 vs 54.8 prior) and FOMC speakers: stronger price/employment components would support a more hawkish Fed and weigh on risk assets, while weaker readings could improve cut odds. Given stretched AI valuations highlighted after Nvidia’s earnings and the technical breach below the 50‑day EMA, equity rallies should be treated as data‑contingent and exposed to FX‑driven flow reversals.
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moderately negative
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-0.45
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