Asian markets head lower on US labour market data

Monday, April 07, 2014

Asian equities carried on the sell-off that dominated Wall Street on Friday as Japanese investors pulled back after a three session rally on weaker US non-farm payrolls data and revised expectations that the BOJ would hold off from further stimulus measures. Both the benchmark Nikkei and TOPIX indices faced heavy selling pressure throughout the session, closing 1.69% and 1.57% lower respectively. Investors having suddenly lost the appetite for risk assets piled into the yen, pushing the currency to 103.29 against the dollar on Friday. Levels this morning have dropped back towards 103.00.

Spot gold prices rallied higher on Friday, adding 1.3% and closing at $1,303.50/oz as investors assessed the pace of stimulus. With non-farm payrolls coming in at 192K, 5K below last months revised figure and missing consensus estimates of 200K additional positions, expectations of an accelerated withdrawal of stimulus measures were crimped. Concerns of a struggling US labour market were further reinforced by the release of the unemployment rate, which remained unchanged in March at 6.7% against expectations of a drop to 6.6%. Prices this morning have been trading around $1,301/oz, finding tentative support above $1,300/oz.

European stocks are anticipated to open lower as stock index futures signal a continuation of the bearish sentiment that dominated the Asian session. Apart from eurozone investor confidence and German industrial production data investors will be left mulling over Friday’s weaker jobs data. Additionally, market participants will be paying close attention to comments on the US economy and monetary policy by St Louis Fed President James Bullard, who will be speaking later this afternoon.

Non-farm payrolls miss expectations, adding 192K positions in March

NFP TCH Index US Employees On N 2014 04 07 07 43 29

US unemployment rate unchanged at 6.7%

USURTOT Index U 3 US Unemployme 2014 04 07 07 43 06

Spot gold prices rebounded above $1,300/oz on labour market data

XAU Curncy Gold Spot Oz D 2014 04 07 07 34 32


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