Asian stocks fall in the face of sharp declines in the US rate By Reuters

By Swati Pandey

SYDNEY (Reuters) – Asian stocks saw a wave of red Monday after strong job gains in the US that tempered expectations, the Federal Reserve will proceed to a sharp rate cut as the read Turkey has been close to the two-week low due to concerns over the central bank's independence.

US investment bank Morgan Stanley's decision to reduce its exposure to global equities also dampened sentiment in market share, amid doubts about the ability of policy easing to offset weak economic data.

The shabby climate has extended beyond Asia with the Euro Stoxx 50 () futures opening on all regions () opening at 0.4%, while those in the United States have not. Germany () and London () fell by 0.5% and 0.3% respectively. The electronic mini for the S & P500 () decreased by 0.25%.

In rare cases, all Asian markets were in the red on Monday. The MSCI's largest share of Asia Pacific ex-Japan shares () lost 1.4%. Japan's Nikkei () fell 1%.

Chinese equities were sold strongly with a prime index () of 2.2% and a Hang Seng index of Hong Kong () of 1.8%.

The KOSPI () of South Korea (2.1%) and Australian stocks () slid by about 1.2% to their lowest level in five weeks.

"We are reducing our exposure to global equities to a range that we consider to be underweight," said Morgan Stanley's London strategist Andrew Sheets. The previous range was "neutral".

Costly valuations and earnings pressure were among the reasons for the rating downgrade, Sheets said, as the bank increased exposure to emerging market sovereign credit and Japanese government bonds.

Since the beginning of the year, global equities have generally been supported by forecasts that central banks would keep interest rates at record levels or close to their lowest levels to stimulate economic growth. .

These expectations were tempered by a US report on the work released Friday that non-farm payrolls jumped from 224,000 in June to over 160,000, a sign that the world's largest economy is still on fire.

Given the strength of this data, investors now expect US Federal Reserve Chairman Jerome Powell to slow down its rate cuts this year.

Bets on aggressive Fed easing have already begun, with the market now forecasting a 27 basis point easing this month, up from 33 basis points before the payroll.

Powell will provide further insights into the near-term outlook for monetary policy this week in his half-yearly testimony to the US Congress.

"Global equities are undoubtedly expensive, but valuation has been driven by lower yields and more liquidity, which makes Thursday's speech by Fed Chairman Powell so important," said Chris Weston, strategist at Pepperstone.

"For those who hold positions in dollars, gold or US stocks (…), Powell's testimony is a risk of event and we must consider how any reaction would affect our exposures."

COINS AND GEOPOLITICS

There was positive news about the long China-United States. trade war with White House economic adviser Larry Kudlow, confirming that the highest representatives of the United States and China will meet next week for trade negotiations.

"The question of whether the negotiators can find a solution to the difficult structural problems that remain between the two parties is another issue, and Mr Kudlow warned that there was no timetable" to achieve to an agreement, "said Rodrigo Catril, strategist of the National Australia Bank.

In the currency markets, the action took place under the Turkish lira which has weakened to 5.77930 for a dollar, its lowest level since June 28 after the governor of the central bank of Turkey, Murat Cetinkaya, whose four-year term was to end until the end of the year. 2020, was replaced by his deputy Murat Uysal.

President Tayyip Erdogan dismissed Cetinkaya for refusing the government's repeated demands for rate cuts, setting clear differences between them over the timing of interest rate cuts to revive the economy affected by recession.

The (), which measures the greenback against a basket of major currencies, was slightly weaker at 97.245 after climbing to a peak in two and a half weeks with 97.443 on Friday.

The euro () was a little lower at $ 1.1224, not far from a 2 and a half week low of $ 1.125 hit Friday.

The Australian dollar , which has been rising since June 18, slipped below 70 US cents to trade at $ 0.6985.

Geopolitics could be the focus of attention this week after the announcement Sunday that Iran will intensify its uranium enrichment, in violation of the ceiling set by a historic nuclear deal in 2015.

"Until now, US-Iranian tensions have not had a significant impact on the markets, but if tensions escalated, the situation could be different," said Catril, of NAB.

In commodity markets, oil prices rose, with Brent (), the international benchmark for oil prices, rising 5 cents to 64.28 dollars a barrel and 4 cents to 57 cents, $ 55.

gained 0.3% to $ 1,403.21 an ounce.