GLOBAL NEWS-
U.S. employment growth accelerated from a 17-month low in March, assuaging fears of an abrupt slowdown in economic activity, but a moderation in wage gains supported the Federal Reserve’s decision to suspend further interest rate increases this year.Milder weather boosted hiring in sectors like construction, but worsening worker shortages and lingering effects of tighter financial market conditions at the turn of the year left job growth below 2018’s brisk pace. The Labor Department’s closely watched employment report on Friday also showed a small upward revision to February’s meager job gains.
U.S. and Chinese negotiators wrapped up their latest round of trade talks on Friday and were scheduled to resume discussions next week to try to secure a pact that would end a tit-for-tat tariff battle that has roiled global markets.
The dollar sagged on Monday as bond yields extended their decline after a U.S. jobs report showed wage growth lose momentum even as employment increased.The closely watched data released on Friday showed nonfarm payrolls rose by a solid 196,000 in March, topping expectations and giving riskier assets a much-needed lift.However, other components of the U.S. employment report suggested the economy wasn’t firing on all cylinders.
China wants to work with the European Union on issues from climate change to trade, Premier Li Keqiang wrote in a German newspaper before a summit next week aimed at cementing ties. Diplomats in Brussels have said that tensions over trade, investments and minority rights mean China and the EU may fail to agree a joint declaration at the April 9 summit.That could dent European efforts to gain greater access to Chinese markets. In a column for Monday’s edition of Handelsblatt, extracts of which were released on Sunday, the Chinese Premier denied accusations Beijing was trying to split the bloc by investing in eastern European states.“We emphatically support the European integration process in the hope of a united and prosperous Europe,” wrote Li. He said Beijing’s close cooperation with eastern European states was “advantageous for a balanced development within the EU”.
South Korea’s won slipped to its lowest level since September 2017 as foreign investors looking to repatriate dividends boosted demand for dollars.This currency slid as much as 0.8 percent to 1,144.95 per dollar, before ending the day at 1,144.70. Offshore and onshore traders are long the greenback amid the dividend payments.Monday’s decline -- which deepened this year’s losses for Asia’s worst-performing currency -- comes after overseas investors sold a net $173.8 million of South Korea-listed bonds on April 5, according to Financial Supervisory Service data. That’s the biggest outflow since Jan. 25.“Investors’ counter-remittance of dividend payments is typically focused in March and April,” said Ha Keon-hyeong, an economist at Shinhan Investment Corp. in Seoul. “The jump in the dollar-won spot due to supply and demand factors has led to some short-covering in the greenback.”Sentiment toward the won also weakened as Norway’s $1 trillion sovereign wealth fund got the go head from its government to cut bonds from 10 emerging markets in its index, including South Korea.
Singapore’s central bank is expected to keep monetary policy unchanged next week, amid pressure from slowing global growth and softening domestic demand, according to a poll.Seventeen of 20 analysts polled, or 85 percent, expect the Monetary Authority of Singapore to keep its exchange-rate based policy steady when it issues its semi-annual policy statement on April 12 at 8 a.m. (0000 GMT), after two tightening moves last year.“There is no urgency for the Monetary Authority of Singapore (MAS) to tighten monetary policy a third time.
Japan’s core machinery orders likely rose for the first time in four months in February, a Reuters poll showed on Friday, but weak external demand and the U.S.-China trade war continue to cloud the outlook.Core machinery orders, a volatile data series regarded as an indicator of capital spending in the following six to nine months, likely grew 2.5 percent in February from a month earlier, the poll of 17 economists showed.\In January, orders dropped 5.4 percent from the previous month.To economists, the anticipated gain in February is not strong enough to change a trend of lacklustre core machinery orders, which exclude those for ships and electric power utilities.
Britain’s government held out the possibility of compromise with the opposition Labour Party on Sunday to try to win support in parliament for leaving the European Union with a deal, just days before the latest Brexit date.Prime Minister Theresa May, weaker than ever after her Brexit deal was rejected by parliament three times, made another appeal to the public to explain why she turned to Labour leader Jeremy Corbyn after giving up on winning over eurosceptics in her Conservative Party, whose opposition has hardened.With Britain’s departure now set for April 12, May’s government is running out of time to get a deal through a divided parliament, and must come up with a new plan to secure another delay from EU leaders at a summit on Wednesday.Britain’s biggest shift in foreign and trade policy in more than 40 years is mired in uncertainty, with ministers saying Brexit may never happen, businesses worried the country could leave without a deal, and others just wanting to reverse it.
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UNITED STATE- MAXICO- CANADA
More than six months after the United States, Mexico and Canada agreed a new deal to govern more than $1 trillion in regional trade, the chances of the countries ratifying the pact this year are receding.The three countries struck the United States-Mexico-Canada agreement (USMCA) on Sept. 30, ending a year of difficult negotiations after U.S. President Donald Trump demanded the preceding trade pact be renegotiated or scrapped.But the deal has not ended trade tensions in North America. If ratification is delayed much longer, it could become hostage to electoral politics.The United States has its next presidential contest in 2020, and Canada holds a federal election in October.The delay means businesses are still uncertain about the framework that will govern future investments in the region.“The USMCA is in trouble,” said Andres Rozental, a former Mexican deputy foreign minister for North America.Though he believed the deal would ultimately be approved, Rozental said opposition from U.S. Democrats and unions to labor provisions in the deal, as well as bickering over tariffs, made its passage in the next few months highly unlikely.Canada’s Parliament must also ratify the treaty and officials say the timetable is very tight. Current legislators only have a few weeks work left before the start of the summer recess in June, and members of the new Parliament would have little chance to address ratification until 2020.
Asian shares inched up to seven-month highs on Monday as investors cheered a rebound in U.S. payrolls and hints of more stimulus in China, though there was some caution ahead of what is likely to be a tough U.S. earnings season.In a document published on the central government’s website late on Sunday, Beijing said it would step up a policy of targeted cuts to banks’ required reserve ratios to encourage financing for small and medium-sized businesses.Chinese blue chips climbed 1.4 percent to territory not visited since March last year. MSCI’s broadest index of Asia-Pacific shares outside Japan followed by gaining 0.4 percent to its highest since August.Japan’s Nikkei also made its high of the year so far and was last up 0.1 percent. E-Mini futures for the S&P 500 were little moved.
Gold prices rose to a one-week peak on Monday as the dollar edged lower, while investors awaited minutes of the U.S. Federal Reserve’s March meeting later this week.Spot gold gained about 0.4 percent to $1,295.81 per ounce by 0358 GMT, having hit a session high of $1,296.69 earlier. U.S. gold futures were also up 0.4 percent at $1,300.10 an ounce.“The dollar index is pulling back from multi-week highs,” said Margaret Yang, a market analyst with CMC Markets, Singapore, adding that a softer dollar was acting as a tailwind for gold.“Though the non-farm payrolls data was better than expected, the manufacturing jobs fell which is a bad signal for the sector and doesn’t show a bright picture for the economic outlook.”The dollar was down 0.1 percent against key rivals, making bullion cheaper for holders of other currencies.
Oil prices rose to their highest level since November 2018 on Monday, driven upwards by OPEC’s ongoing supply cuts, U.S. sanctions against Iran and Venezuela, and strong U.S. jobs data.International benchmark Brent futures were at $70.65 per barrel at 0441 GMT on Monday, up 31 cents, or 0.4 percent from their last close.U.S. West Texas Intermediate (WTI) crude were up 31 cents, or 0.5 percent, at $63.39 per barrel.Brent and WTI both hit their highest since November at $70.76 and $63.48 a barrel, respectively, early on Monday.“Brent prices increased more than 30 percent year-to-date as OPEC+ continued to cut supply for four months in a row and optimism over U.S.-China trade talks helped to buoy the demand outlook,” U.S. bank J.P.Morgan said in a note.To prop up prices, the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia, known as OPEC+, have pledged to withhold around 1.2 million barrels per day (bpd) of supply this year.