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US jobs, Nvidia ( NVDA ) earnings headline week ahead

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Japan economy contracts on US tariff hit; Nikkei flat

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Dollar up slightly vs euro

By Tom Westbrook

SINGAPORE, Nov 17 (Reuters) - Asia's stock markets

struck a cautious tone on Monday as traders looked ahead to a

week of corporate earnings and catch-up U.S. data, with the

focus on the interest rate outlook and the fate of a frothy

rally in artificial intelligence stocks.

Hesitant-sounding policymakers have driven market

expectations for a U.S. rate cut in December back from more than

60% a week ago to 40% on Monday and put pressure on stocks.

S&P 500 futures were 0.3% higher in early trade.

Japan's Nikkei was flat, but tourism and some retail

stocks fell heavily after China cautioned citizens against

visiting Japan as a diplomatic dispute deepens.

Shares in department store operator Isetan Mitsukoshi ( IMHDF )

and cosmetics-maker Shiseido ( SSDOF ) notched drops of

around 10%.

In Australia, a 0.7% drop for BHP after Britain's

high court found it liable for a dam collapse in Brazil weighed

on the bourse, which hit a four-month low.

Wall Street indexes recovered from a steep selloff on Friday

to notch a mixed close, with a small drop for the S&P 500

and modest gain for the Nasdaq. Ten-year U.S. Treasury

yields rose on Friday held at 4.156% in Tokyo.

JOBS, DELAYED

The headline U.S. data release this week will be Thursday's

delayed September jobs report.

The figures may be too stale to be of much use, since

private surveys have already flagged a labour market slowdown.

But with 19 appearances by Federal Reserve officials on the

cards this week, their framing of the data will also be

scrutinised.

On Friday, Kansas City Federal Reserve President Jeffrey

Schmid and Dallas Federal Reserve President Lorie Logan sounded

hawkish and cast doubt on the need to cut rates next month.

"There are expectations that weaker jobs data and higher

inflation will mean balanced risks. Neither is good for risk, as

stagflation returns to the lexicon," said Bob Savage, BNY's head

of markets macro strategy.

Data in Asia showed Japan's economy contracted for the first

time in six quarters due to a hit from U.S. tariffs.

The Nikkei newspaper reported over the weekend that Japan is

considering spending around 17 trillion yen ($110 billion) in

new Prime Minister Sanae Takaichi's first stimulus package,

underscoring her focus on expansionary fiscal policy.

That kept pressure on the yen at 154.54 per dollar

and had markets on intervention-watch, while the bond market

slid and sent 10-year yields to their highest

since 2008.

Some analysts see risks of flight if investors' faith in

fiscal discipline is shaken, much as it was in Britain last week

when stocks, bonds and sterling tumbled on reports Finance

Minister Rachel Reeves was backing away from tax hikes.

NVIDIA EARNINGS

Home Depot ( HD ), Target ( TGT ), Walmart ( WMT ) and

Nvidia ( NVDA ) report earnings in the U.S. this week and all

eyes are on the chipmaker, where the market's response is

shaping as a test of the sparkling rally.

"If you don't see the growth that I think the market is

expecting around Nvidia ( NVDA ) or the positive commentary that we are

likely to get from Nvidia ( NVDA ) going forward, I think you're going to

see more of a dent to those sorts of trades," Orton said.

Nvidia ( NVDA ) shares have soared about 1,000% since the launch of

ChatGPT in November 2022. This includes a year-to-date gain of

more than 40% that made Nvidia ( NVDA ) the first company to surpass $5

trillion in market value last month.

Elsewhere, in foreign exchange the dollar was up slightly,

holding the euro to $1.1607 and creeping higher on other

majors.

Gold nursed Friday losses at $4,084 an ounce. Brent

crude futures slipped 1% to $63.78 in the Asia morning.

Bitcoin, which has lately behaved as a barometer of

liquidity and the mood on technology stocks, was nursing its

largest weekly fall since March, having lost more than 10% last

week. It traded at $94,717.