Standard & Poor’s 500 Index futures declined 0.7 percent from their April 2 close as of 3:19 p.m. in Tokyo, paring a 1 percent drop in abbreviated trading Friday.
Japan’s Topix index slipped 0.2 percent. Gold advanced 0.9 percent, while Malaysia’s ringgit climbed 1.2 percent after the U.S. currency tumbled Friday. Oil added 2.4 percent in New York as Saudi Arabia raised pricing for May sales to Asia.
U.S. payrolls trailed even the most pessimistic forecast, spurring speculation that the Federal Reserve will delay raising interest rates. While data signaling rates near zero for longer have previously been welcomed, concern is building among American equity investors that economic weakness will worsen the outlook for corporate profits.
New York Fed President William C. Dudley speaks today. The jobs data “is going to reinforce the perception that the move towards tighter policy in the U.S. is going to be very slow and measured,” Todd Elmer, a Singapore-based currency strategist at Citigroup Inc., said in a Bloomberg Television interview with Angie Lau.
“That itself will tend to force investors to move into other currencies.” U.S. exchanges reopen at 9:30 a.m. on Monday in New York after being closed for the Good Friday holiday. Treasuries held gains Monday after yields on 10-year notes fell seven basis points in a shortened session on April 3.
Surprise Slump
Economic reports have lagged analyst forecasts since early January, with the Bloomberg Eco U.S. 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 126,000 workers added in March was less than any forecast in a Bloomberg survey and the lowest monthly total since December 2013.
That followed a 264,000 gain a month earlier that was smaller than first reported as energy companies pulled back, the strong dollar and tepid overseas markets hurt manufacturers and rough winter weather restrained consumer spending.
“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.
Dollar Weakness
The Bloomberg Dollar Spot Index was little changed after falling to its lowest level in a month Friday.
The yen traded at 118.97 Monday after jumping 0.6 percent on the jobs report. Malaysia’s ringgit was at 3.6265 per dollar, the strongest since March 4, while South Korea’s won advanced 0.7 percent and India’s rupee added 0.6 percent.
A Bloomberg index tracking 20 emerging currencies versus the greenback climbed for a fourth day, the longest streak this year. The Topix dropped after capping a 10th weekly advance in 11 weeks on Friday. Asahi Co. plunged 8.8 percent after reporting a 37 percent drop in net income.
Toshiba Corp., a maker of computer chips and nuclear components, headed for its biggest one-day loss since January 2014 amid an accounting probe. Sharp Corp. rose the most in 14 months after a person familiar with the matter said the company plans to ask a government-backed investment fund to help spin off part of its liquid-crystal display business.
U.S. Earnings
South Korea’s Kospi index was little changed while the Jakarta Composite Index increased 0.4 percent. Markets in Hong Kong, mainland China, Australia and New Zealand are closed today. Alcoa Inc. unofficially kicks off the U.S. earnings season this week.
Analysts predict profits for S&P 500 companies fell 5.8 percent 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 percent and 1 percent over the second and third quarters, the estimates show.
“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 $10 billion as chief executive officer of Marketfield Asset Management in New York.
West Texas Intermediate crude traded at $50.33 a barrel. Brent rose 1.8 percent to $55.95 in London, recovering from a 3.8 percent tumble after Iran and six countries, including the U.S., agreed on a framework accord on April 2 over the Islamic republic’s nuclear program.
State-owned Saudi Arabian Oil Co. narrowed the discount for its Arab Light grade to Asia to the least since December, setting the crude at a discount of 60 cents a barrel to the regional benchmark, the company said in an e-mailed statement.
The May pricing is 30 cents higher than in April. The value of all U.S. imports from Saudi Arabia plunged 61 percent in the first two months of 2015, according to data last week. Copper rose 1.7 percent in U.S. trading, rebounding from a two-week low. Metals trading is closed in London and Shanghai for holidays.
bloomberg.com
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