After some significant gains towards the end of 2015, employment eased in the two months to January.
Jobs edged down 7.9k in January, following a 0.8k decline over December. While the decline disappointed markets, on average, job growth has weakened to a more realistic pace given the below-trend pace of economy.
The decline in jobs in January saw the unemployment rate edge up from 5.8% in December to 6.0% in January, although this remains below the July 2015 peak of 6.3%.
Leading indicators continue to point to a relatively healthy labour market in the near-term, and supports the view that the unemployment rate is not about to trend significantly higher.
Ongoing above-average conditions in non-mining sectors of the economy should also help prop up demand for employment.
US equity market were a touch weaker overnight, giving back some of the gains made over the past three sessions. Walmart led consumer stocks down as its results disappointed the market.
Banking stocks were also weaker. The Dow was down 0.3% and the S&P500 fell 0.5%. In Europe, markets were mixed.
The FTSE100 was down 1.0% but the French market was up 0.2% and the German Dax index rose 0.9%.
The softer US sharemarket saw demand for bonds rise and yields decline.
Ten year US government bond yields fell 7 basis points to 1.75% while 2 year yields fell 4 basis points to 0.70%.
Long bond yields were also lower in Germany, the UK and Japan.
The minutes of the January European Central Bank (ECB) meeting showed pre-emptive action against rising global risks was discussed, implying it may ease in March.
The US dollar index moved higher in the middle of the overnight session but faded there-after. The euro edged down to a two week low while the AUD was also marginally weaker.
A relatively quiet night for commodities. Oil edged a little higher and copper was marginally weaker. Gold lifted a further 2.2% while iron ore continued its rise and currently trades at $US47.14 per tonne.
Chinese CPI rose 1.8% in the year to January, up from an annual rate of 1.6% in December.
The CPI was pushed up by higher food prices, buoyed by the lead up to Chinese Lunar New Year.
Producer prices continued to be in decline, contracting 5.3% in the year to January although the rate of decline lessened from a 5.9% contraction in the year to December.
Overall, price pressures remain muted and declining producer prices continue to suggest spare capacity remains in the economy.
The minutes of the January ECB meeting showed pre-emptive action against rising global risks was discussed, implying it may ease in March.
Exports (-12.9%) and imports (-18.0%) both contracted in the year to January. While the decline in exports poses a negative sign for global trade, some of the weakness could have been affected by the lead-up to the Chinese New Year.
ANZ job ads declined 3.2% in January, the first decline in five months.
ANZ consumer confidence fell 10.4% to 119.7 in February, likely reflecting recent turbulence in global financial markets.
No major data released.
US jobless claims fell from 269k to 262k in the week to February 13th. Claims are averaging 265k in February, below January's 284k average. This suggests that the February payrolls number should be firm. The Philadelphia Fed business survey rose from -3.5 to -2.8.
Average annual inflation expectations in the US, over the next three decades, fell to 1.47% after the US sold $7 billion in 30-year Treasury Inflation-Protected Securities (TIPS) overnight. Demand for TIPS fell to its lowest since 2000.
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