Asia follows US higher as investors await non-farm payrolls

Friday, March 07, 2014

US stocks managed to push higher on better than expected jobless claims as the hopes of steady progress between Russia and the Ukraine allowed investors to focus attention back towards economic data. Initial weekly jobless claims dropped by 25,000 w/w as the dampening effects of the recent cold snap subsided. Both the S&P 500 and DJIA pushed higher with the S&P 500 pushing to a record high of 1877.03 as optimistic investors positioned themselves in anticipation of non-farm payroll numbers later today. According to a Bloomberg survey, market participants are expecting 149k jobs to be added throughout February, up from 113k the previous month while the unemployment rate is expected to remain unchanged at 6.6%. Investors will also be awaiting trade data with the expectation of a slight reduction in the deficit to -$38.5b in January.

Asian markets were mixed overnight with Japanese equity indices spurred higher by gains on Wall Street while Chinese stocks struggled to hold on to the previous session’s gains. Both the Nikkei and TOPIX made steady progress, managing to add 0.92% and 0.7% respectively, as they followed US markets higher on better than expected initial weekly jobless claims. CNY gained for a third day yesterday, pulling back towards 6.1100 before closing at 6.1187 against the dollar on continued PBOC intervention. Early this morning the onshore currency tested the 200 day MA towards 6.1020 before drifting back towards yesterday’s close. 

Reinforced commitments from the BOE and ECB to shoring up economic conditions will boost investor confidence; however, falling prices remain a concern for policy makers which will require close monitoring. The move by the ECB to leave interest rates and stimulus unchanged at 0.25% and $175bn respectively pushed the euro towards 1.3870 against the dollar.

Spot palladium prices traded near a 12 month high on threats of economic sanctions against Russia, the world’s biggest supplier, could limit supply. Prices have rallied 5.4% since the start of the month, pushing above $780/oz as mine strikes in South Africa compound supply worries.

 

CNY pulls back against the dollar on PBOC money market intervention

CNY Curncy China Renminbi Spot 2014 03 07 07 51 04

ECB commments push the EUR towards 1.3870 against the dollar

EUR Curncy Euro Spot 2014 03 07 07 58 22

Spot palladium prices rally on Russian output concerns

XPD Curncy Palladium Spot Oz 2014 03 07 08 04 13


Events for today

0500

JP

Jan

Leading Index

1100

DE

Jan

Industrial Output

1330

US

Jan

Trade Bal

1330

US

Feb

NF Payrolls & Unemployment

2000

US

Jan

Consumer Credit

All times UK Local Time

Economic Market Calendar

Topics: Equities, ECB, BoE, EUR, CNY, Palladium
More from: Kash Kamal