Financial markets are mixed in Asian session on Tuesday as investors are still digesting the implications of the smaller-than-expected US payroll additions in March. In the stock market, Japan's bourses rose as driven by exporters while the Hong Kong Hang Seng Index gapped lower. The MSCI Asia Pacific Index has changed little so far. In the commodity sector, both oil and gold have been moving narrowly after the late rebound on Friday. Crude plunged initially after the disappointing job report and the scheduled resumption of Iran talk on April 14. Losses were pared later in the day, however. Gold's firmness has been due to renewed speculations of QE3.
US' non-farm payrolls increase +120K, compared with market expectations of an addition of +205K, in March. The unemployment rate fell -0.1% to 8.2% due to a drop in the participation rate. Payrolls in the services sector fell across the broad with retailing, employment services and temporary help losing -33.8K, -14.2K and -7.5K positions. It is believed that the cold weather had helped bolster the job market but the impacts unwound in March. While data in coming months are needed to judge if the employment trend has got worse, expectations of further easing from the Fed emerged with the 10-year Treasury yield falling the most since December last year.
The 5 UNSC permanent members and Germany will resume the negotiation with Iran on its nuclear development program on April 14. The EU spokesman Michael Mann stated that they are aiming at a sustained process and hope that this first round will produce a conducive environment for concrete progress. Iran's Supreme National Security Council stated that the country would not accept any pre-condition for the talks, in response to an unverified news from the US the Western allies have would request Iran to close the nuclear enrichment facility in central Iran.
Only second-tier economic indicators will be released today. The Eurozone Sentix Investor Confidence probably slipped to -9.1 in April from -8.2 in March. In Germany, the trade surplus probably narrowed to 12.0B euro in February from 13.1b euro a month ago.
Commitments of Traders:
With the exception of gasoline, speculators were bearish over the energy complex in the week ended April 3. Net length for crude oil futures declined -13 895 contracts to 215 557. Net length for heating oil fell -8 512 contracts to 21 574 while that for gasoline climbed +5 990 contracts to 97 904. Net short for natural gas futures slid -24 65 contracts to 124 082.
Similarly, speculators were mixed on precious metals. Net length for gold futures fell -6 056 contracts to 141 765 while that for silver increased +1 400 contracts to 20 055 contracts. For PGMs, net length for platinum added +435 contracts to 23 955 while that for palladium slid +1 545 contracts to 6 596.