Rise in job ads points to employment growth to come

Australia: 

ANZ job ads rebounded 1.0% in January, after slipping 0.1% in December. 

For the year to January, job ads increased by 10.8%. The recent trend in job ads points to moderate employment growth in coming months. 

Share Markets:

US stocks followed Europe lower overnight as concerns over the health of the global economy intensified.

While oil prices were lower, the market for financial and technology related companies was also weaker.

Having been down 400 points in the earlier in its session, the Dow stood 178 points or 1.1% lower at 8am this morning.

In Europe, the FTSE100 finished 2.7% lower, the Dax was down 3.3% and the French CAC40 fell 3.2%.

Interest Rates: 

With risk aversion high on the agenda, demand for treasuries rose and yields fell. US 10 year government bond yields fell 9 basis points to 1.75%, their lowest since early last year.

German long bond yileds fell 8 basis points to just 0.22% - suggesting the market is not expecting a pick-up in German inflation any time soon and is searching for a safe haven in a world of financial instability.

UK long bond yields fell a very substantial 15 basis points to 1.41%. In Australia yesterday, yields edged higher but futures trade points to lower yields today with 10 year government bonds at an implied yields of 2.46%.

In the US, the cost of protecting against default by US 'junk-rated' companies climbed to the highest since 2012. Part of the problem is the financial stress imposed on some debt-heavy energy companies by low oil prices.

Foreign Exchange:

The US dollar index was volatile last night and begins today a touch lower than it began yesterday.

The AUD was equally up and down but begins the day marginally firmer than it began the week - despite weaker commodity prices overnight.

Relatively firm interest rates in Australia plus its good credit rating appear to be giving the AUD support.

Commodities:

The price of oil slipped lower as did the price of copper but the price of gold picked up as investor caution took hold.

The price of iron ore is up 11.3% over two weeks and up 19.4% from its low of last year.

Eurozone: 

Eurozone Sentix investor confidence slipped from 9.6 to 6.0 in February. The drop in this forward looking indicator, particularly in Germany, is a potential signal of slower growth ahead.

Japan:

The current account surplus narrowed to ¥960.7bn in December, from ¥1143.5bn in November. This was the 18th consecutive current account surplus for Japan, with the low oil price helping contain imports.

United States:

The Fed's US Labour Market Conditions index rose a less-than-expected 0.4 points in January.

This index is a weighted average of 19 already known labour market indicators, and is more a confirmation of the improvement to date.

However, the recent slowdown in its momentum will have been noted by markets.



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