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[NEW YORK] US stock futures maintained most of the decline spurred by data Friday that showed the weakest American hiring additions in more than a year. Japanese equities were indicated lower and gold rallied with the euro.
Standard & Poor's 500 Index futures retreated 0.8 per cent from their close on April 2 as of 8.17am in Tokyo, maintaining most of the 1 per cent decline in abbreviated trading Friday. Contracts on the Nikkei 225 Stock Average fell 0.7 per cent in Osaka. Gold rallied 0.8 per cent, while the euro climbed 0.4 per cent to US$1.1013. Oil added 1.4 per cent in New York.
The US currency tumbled with equities futures on Friday, while Treasuries surged as the payrolls report damped the outlook for the timing of an interest-rate increase by the Federal Reserve. The 126,000 workers added in March was fewer than the most pessimistic forecast in a Bloomberg survey and the lowest monthly total since December 2013. New York Fed President William C. Dudley speaks today.
"There's no doubt it is a bad report and makes it much less likely the Fed will be ready to go by June," wrote Elsa Lignos, a senior currency strategist at RBC Capital Markets LLC, in a note dated April 6. US exchanges reopen at 9.30am on Monday in New York after being closed for the Good Friday holiday.
Economic reports have lagged analyst forecasts since early January, with the Bloomberg Eco US Surprise Index falling to its weakest reading since 2009 last month. Minutes of the Fed's latest meeting, after which it noted that "growth has moderated somewhat," are due for release Wednesday.
The increase in payrolls followed a 264,000 gain a month earlier that was smaller than first reported, according to the jobs report. While investors have occasionally welcomed weaker data on grounds they delayed a Fed interest rate boost, concern is building that too weak an expansion will worsen a drop in corporate profits.
The Bloomberg Dollar Spot Index fell 0.2 per cent in early Asian trade, heading lower for a fourth day, the longest losing streak since July. The greenback was weaker against 12 of 16 major peers.
Alcoa Inc. unofficially kicks off the US earnings season this week. Profits for S&P 500 companies are forecast to fall 5.8 per cent in the first quarter as results were buffeted by tumbling oil prices and a stronger dollar. Investors may face the longest stretch of declines since the financial crisis, with slumps of 4.2 per cent and 1 per cent over the second and third quarters, according to analyst estimates.
"Overall we would avoid making any strong conclusions regarding the state of the economy, but the fact that this weak report follows a number of other poor data points means that both bond and equity markets will be very sensitive to any signs of weakness in the upcoming earnings season," wrote Michael Shaoul, who helps oversee US$10 billion as chief executive officer of Marketfield Asset Management in New York.
West Texas Intermediate crude traded at US$49.84. Brent rose 0.9 per cent to US$55.43 in London, recovering from a 3.8 per cent tumble after Iran and six countries, including the US, agreed on a framework accord on April 2 over the Islamic republic's nuclear programme.
Dubai stocks posted their biggest advance in more than three weeks, leading gains in Gulf Cooperation Council markets, as rebels in Yemen retreated from the port city of Aden.
Iran was the United Arab Emirates' fourth-biggest trading partner in 2013, accounting for almost US$32 billion of imports and exports, according to data compiled by Bloomberg.
The DFM General Index climbed 1.4 per cent to 3,665.56, its highest close since March 12. Qatar's QE Index added 0.6 per cent and Abu Dhabi's ADX General Index rose 0.1 per cent. The Tehran Stock Exchange's main index jumped 3.5 per cent.