Asian stock markets drift ahead of key USA job report

The Dow Jones Industrial Average dropped as much as 259 points in early trade, but recovered somewhat to trade 62 points, or 0.4, higher at 16,335, with losses in financials including (http://www.marketwatch.com/story/ugly-jobs-report-is-punishing-financial-stocks-2015-10-02)J.P. Morgan & Chase (JPM) and Goldman Sachs Group (GS), capping gains.

Payrolls outside of farming rose by 142,000 last month and August figures were revised sharply lower to show only 136,000 jobs added in August, the Labor Department said on Friday.

Employers in the world’s biggest economy are expected to have added a healthy 206,000 jobs in September, resulting in the unemployment rate holding steady at 5.1%, according to analysts’ forecasts.

HONG KONG (AP) – Asian stock markets were muted on Friday as investors waited for a U.S.jobs report that could influence whether the U.S. Federal Reserve chooses October or December for its first interest rate hike in almost a decade.

“Slower job growth, falling participation and stagnant wage growth are hardly a recipe for rate hikes, despite Williams’ attempt to lower the jobs bar yesterday”, said Chris Low, chief economist at FTN Financial. Shares in Australia, meanwhile, were down 0.8%. Goldman Sachs forecasts the S&P 500 will return to 2,000 at the end of the year after suffering its steepest drop in four years in the third quarter.

USA economic strength will provide a boost to the dollar.

Fed Bank of San Francisco President John Williams said yesterday that risks to the economy from developments overseas haven’t worsened and that domestic conditions remain positive, while repeating his call to raise interest rates this year. Dollar traders are also apprehensive of Friday’s US employment data, which can rattle markets.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.03 per cent.

US stocks rebounded, edging higher on Friday as investors wrestled with implications of a weaker-than-expected jobs report.

In his speech Thursday in New York, Draghi said the eurozone has become more resilient and growth is picking up, the latest indication he thinks the central bank’s accommodative monetary policy is working. “But the Fed may not make its rates decision on employment data alone”, he said.

ASIA’S SCORECARD: Markets in the region drifted, with Japan’s Nikkei 225 rising less than 0.1 percent.

The dollar lost 0.45% against the pound, tumbling 0.59% and 0.88% respectively against the yen and the euro, while gold futures surged 2.46% to $1,141.02.

The price of oil bounced back from two days of losses.

The dollar was steady at 120.02 yen, confined to a tight 120.60-119.245 range so far this week.

In commodity markets, Brent crude oil for December delivery was up at $49.01 barrel.