Asian markets firmer despite weak US job numbers

Asian shares and currencies were mostly firmer over-night in the wake of surprisingly weak US jobs numbers that added to the case for the Federal Reserve to keep rates low for longer. Friday's disappointing data pulled down bond yields and the dollar, while lifting prices for gold and many commodities. It was also seen as beneficial for some emerging market countries which had been pressured by funds flocking to western assets.

While activity was curbed by a Japanese holiday, South Korea managed a rise of 0.7 per cent and MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.6 per cent. Emerging markets fared well with the Philippines up 1.7 per cent and Indonesia more than 2 per cent. But Shanghai went flat after China set its yuan at a record high for a second straight session, extending the gradual appreciation of the currency. Most other currencies in the region gained on the US dollar which skidded to 103.33 yen, having shed a full yen on Friday to end at 104.08 in New York. The euro firmed to $1.3682, compared to $1.3590 before the job figures hit dealing screens on Friday. The Australian dollar also got a leg up to $0.9038, its best level in over a month. Dealers said the market had been very long of dollars in anticipation of a strong US jobs number, in part due to a healthy reading from private payroll operator ADT. Instead, payrolls rose just 74,000 in December, the smallest increase in nearly three years and far below the 196,000 forecast. The jobless rate fell sharply to 6.7 per cent though largely because of a fall in the participation rate as people dropped out of the labour force. Still, the unemployment rate is now very close to the 6.5 per cent threshold the Fed had nominated as a level where it might start considering raising interest rates.

The price for nickel gained as a ban on unprocessed nickel laterite ore exports from top producer Indonesia came into effect, fanning a technical rally across other metals. Nickel futures were up 0.9 per cent, on top of a 3.8 per cent jump on Friday. Oil prices retreated after a rally on Friday. Nymex oil futures eased 40 cents to $92.32, while Brent crude oil futures lost 17 cents to $107.08 a barrel. There was little reaction as yet to news of a deal for Iran to freeze parts of its nuclear programme in return for sanctions relief that will take effect on January 20th. Iran will receive some easing of economic sanctions, including the suspension of restrictions on exports of petrochemicals.

Reuters