Payroll data does not deliver (ISFM) (07-01-2011)

Investors were cautious before the payroll data was published, and the caution did not go away when the report came out. The number reported was well under what had been expected, despite the big jump in private sector jobs reported this week, but at least unemployment seems to be inching down.

Earlier in Asia, most stock markets were flat with movements of less than 1% in both directions. In Japan, stocks have been performing better due to the recent fall in the value of the yen, which has eased the pressures on the country's exporters as they battle for business in the international marketplace.

Benchmark oil for February delivery rose 35 cents to $88.73 a barrel electronic trading on the New York Mercantile Exchange, after a sharp drop of  $1.92, or 2 percent yesterday, which erased more than two weeks of gains on concerns that supplies will increase in coming weeks as demand for oil and gas remains soft.

Among currencies, the dollar rallied on the back of a sharp spike in Treasury yields, and was up 0.2 percent at 83.51 yen, while the euro was down 0.2 percent at $1.2979

The nervousness continued in European markets, where losses were also under 1%, although Europe's debt crisis has shifted to the background while investors awaited developments in the U.S. economy. Among good news, governments in Germany, France and Portugal have managed to hold fairly successful bond auctions, although underlying worries remain, not least in Portugal, which is widely considered to be the country most at risk in joining Greece and Ireland in seeking a financial bailout. The yields on its ten-year bonds have spiked up above 7 percent towards the levels that forced the previous bailouts.

On Wall Street, U.S. stocks were fighting to stay in positive territory after a disappointing December jobs report and as Federal Reserve Chairman Ben Bernanke delivered a prepared speech to the Senate Budget Committee.

Source: ISFM