US non-farm payrolls exceeded expectations, but markets focused on the lift in average weekly earnings. The US dollar rose, and market pricing shifted in favour of rate hikes. Commodities were under pressure, although aluminium jumped again. Futures are pointing to further downward moves for Asia Pacific stocks ahead of a full week of macro data.
No news on trade tariffs is a marginal negative for local stock markets and currencies. Canada is standing firm in its negotiations with the US over a replacement for NAFTA, potentially staying the White House’s desire to increase pressure on China. This may see trade concerns move to the back burner this week while private discussions take place.
A 2.9% annual rate of US wage growth is a “goldilocks” result. It indicates an accelerating economy but is not yet threatening an inflation break out. Bonds sold off and yield curves steepened. This back drop could see increased focus on macro data over the week. China will report inflation, retail sales and industrial production, among other releases The ECB is expected to stand on interest rates on Thursday, but analysts will drill hard for its estimates of trade impacts. UK industrial and manufacturing data tonight could set the tone for Sterling.
The Australian dollar is threatening the US 71 cent level, potentially lending support to shares ahead of Thursday’s employment data. China CPI and PPI data may dominate today’s trading session
Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.
