Asian markets lower ahead of US employment yardstick

15.20 AEST, Friday 7 June 2013

Asian markets lower ahead of US employment yardstick

By Tim Waterer (Senior Trader, CMC Markets)

With the most important yardstick of US economic health due on deck, Asian markets appeared less than optimistic on Friday with recent US indicators doing little to boost hopes for a bumper jobs report. Traders were far more inclined to position for possible downside risks given that the poor ADP employment report from earlier in the week dented market confidence. Volatility in financial markets has already shifted up several gears this week and an unexpectedly high or low reading on the US jobs market could further extend the trading ranges seen of late.

True to recent form the ASX200 posted a negative performance today with traders erring on the side of caution ahead of the US employment report. Highlights were few and far between with most sectors slipping lower as the market stumbled towards the long weekend after a recent spate of poor showings. Newcrest Mining was among the notable decliners with the company feeling the pinch from the recent gold price plunge, while the Materials sector overall fared poorly due to heightened global growth concerns. With a raft of Chinese economic data due on the weekend this will likely influence Australian market performance when trading recommences on Tuesday.

Currency markets have not been for the faint of heart this week with large intraday moves becoming the norm. The AUD had a brief burst higher overnight on the hawkish ECB tone however the currency has again run out of buyers today which saw the AUDUSD rate slip below the US$0.95 level. Uncertainty seems to be what is hurting the AUD at the moment with commodity prices unstable, possible further RBA cuts to come, as well as questions over the length of US easing measures. Overall the AUD is just not as attractive to offshore investors as was the case a few months ago.

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