A startlingly low number of US jobs created in February combined with reports of increased difficulty in China /US trade negotiations pushed markets lower on Friday night. Investors fled to safety, boosting bonds, gold and the US dollar and Japanese yen. In contrast stocks, crude oil and industrial metals fell. Futures are painting a mixed picture for Asia Pacific share trading, with Hong Kong and Sydney looking at opening falls but Tokyo tipped to open higher.
Reports that President Xi Jinping has cancelled a planned trade treaty signing ceremony scheduled for later this month started the risk downdraft. The Shanghai Composite shed 4% in a late sell off on Friday, knocking the wind out of European indices. London Metals Exchange trading was negative, although Aluminium bucked the trend. Support for precious metals pushed gold back towards $1,300, despite a stronger dollar.
US non-farm payrolls were forecast to show 180,000 new jobs in February. Instead 20,000 were reported, adding to the pressure on risk assets. However the wages growth data accompanying the jobs release showed an acceleration to 3.4%, contradicting the headline number and moderating the negative reaction.
Traders may be looking at a data dependent week. China industrial production is under scrutiny for economic impacts of the trade dispute, and US CPI and retail sales are on market radar for the same reason. Australian home lending data on Tuesday speaks to one of the hottest local market topics