A woman wearing a Hakama, or Japanese traditional Kimono, holds her mobile phone as she walks past an electronic board, showing the stock market indices of various countries, outside a brokerage in Tokyo, March 23, 2015.© Yuya Shino / Reuters
U.S. stock-index futures retreated after data Friday that showed the weakest American hiring in more than a year. Emerging-market currencies strengthened with gold, while oil climbed as Saudi Arabia raised prices for shipments to Asia.
Standard & Poor's 500 Index futures declined 0.8 per cent from their April 2 close as of 6:05 a.m. in New York, paring a 1 per cent drop in abbreviated trading Friday. Malaysia's ringgit advanced 1 per cent after the U.S. currency tumbled Friday and energy producers led Russian stocks higher. West Texas Intermediate crude jumped 2.9 per cent to $50.58 a barrel and gold rose 0.9 per cent. Markets were closed in western Europe on Monday.
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 by American equity investors, concern is building that economic weakness will worsen the outlook for corporate profits. New York Fed President William C. Dudley is scheduled to speak in New Jersey on the economy.
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.
Economic reports have lagged behind 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.
U.S. employers added 126,000 workers in March, 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.
Earnings season gets under way this week in the U.S. with Alcoa Inc. releasing results. Analysts predict profits for S&P 500 companies fell 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, 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.
The Bloomberg Dollar Spot Index was little changed after falling to its lowest level in a month Friday. The yen traded at 119.10 to the dollar Monday after jumping 0.6 per cent on the jobs report. The euro gained 0.1 per cent to $1.0980.
Malaysia's ringgit rose to 3.6315 per dollar, the strongest since March 4, while South Korea's won advanced 0.7 per cent and India's rupee added 0.5 per cent. A Bloomberg index tracking 20 emerging currencies versus the greenback climbed for a fourth day, the longest streak this year.
Russia's dollar-denominated RTS Index added 1.7 per cent and the ruble gained 0.4 per cent.
WTI oil increased as much as 3.7 per cent to $50.97 a barrel. Brent rose 2.8 per cent to $56.50 in London, recovering from a 3.8 per cent 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 per cent in the first two months of 2015, according to data last week.
Gold for immediate delivery traded at $1,217.63 per ounce. Copper rose 1.8 per cent in U.S. trading, rebounding from a two– week low. Metals trading is closed in London and Shanghai for holidays.