* Markets quiet Monday with Japan and Singapore on holiday
* Focus on U.S. Fed, with several officials speaking
* ECB meeting and US jobs report feature later in week
By Wayne Cole
SYDNEY, Nov 4 Asian markets started the week on
a sluggish note on Monday as investors chose discretion over
valour ahead of central bank meetings in Europe and the
always-critical U.S. payrolls report.
Trading was thinned by holidays in both Japan and Singapore
which kept MSCI's broadest index of Asia-Pacific shares outside
Japan just a fraction firmer at 480.04.
Australia's share market edged up 0.2 percent as
another domestic bank reported record profits.
Major currencies were likewise quiet with the dollar still
well supported in the wake of upbeat U.S. manufacturing data
that stirred speculation the Federal Reserve might scale back
its bond-buying in December, rather than in March as many in the
market currently anticipate.
There are no less than four Fed officials speaking on
Monday, starting with Fed Bank of Dallas President Richard
Fisher in Sydney. Fed Governor Jerome Powell and the heads of
the St. Louis and Boston Feds all appear later in the day.
The dollar index was holding firm at 80.715
having climbed to a six-week peak on Friday. It was also up on
the yen at 98.73 and threatening a major chart target at
The dollar fared best against the euro which was undermined
by speculation the European Central Bank (ECB) would have to
ease again given disappointing news on unemployment and a
startlingly low reading of inflation.
The single currency was pinned at $1.3489 on Monday,
well below its recent high of $1.3832. The ECB holds a policy
meeting on Thursday and it will be under intense pressure to
stimulate the economy.
"We expect the opening statement, and Q&A, to have a
distinctly dovish tone," wrote analysts at RBC Capital Markets
in a note to clients.
"For now, we think that the Governing Council will refrain
from any immediate action, but we expect the downbeat tone of
next week's meeting to lay the groundwork for a policy response
over the next few months."
The Bank of England holds it policy meeting on Thursday and
is expected to stay on hold following a run of improving
economic data recently.
A bigger event for markets will be Friday's U.S. payrolls
report which is expected to show a modest rise of just 125,000
in October, amid some uncertainty about the impact of the
government shut down. A soft report, and particularly any rise
in the jobless rate, would lean against the Fed tapering in
Also of note will be the first reading of U.S. gross
domestic product (GDP) due on Thursday. That is expected to show
annualised growth of 1.9 percent in the third quarter, down from
2.5 percent the previous quarter.
All the talk of Fed tapering saw U.S. Treasury yields rise
for a third straight session on Friday. Yields on the benchmark
10-year U.S. Treasury note jumped to 2.63 percent,
leaving behind the week's low of 2.47 percent.
Cash Treasuries were not trading in Asia on Monday due to
the Japanese holiday, but Treasury futures were 3 ticks
The rise in yields was not enough to deter investors from
buying stocks, and Wall Street ended Friday with moderate gains.
The Dow Jones industrial average finished Friday with
a gain of 0.45 percent, while S&P 500 Index rose 0.29
percent. For the week, the Dow gained 0.3 percent, the S&P added
0.1 percent, while the Nasdaq fell 0.5 percent.
European stock markets eased off five-year highs amid
weakness in regional corporate earnings. The pan-European
FTSEurofirst 300 index of leading European companies
fell 0.31 percent.
In commodity markets, prices were mostly pressured by the
bounce in the U.S. dollar. Spot gold was trading at
$1,314.34 an ounce having crumbled from a peak of $1,361.60 last
Oil prices steadied following last week's losses as a firmer
dollar and ample supplies outweighed concerns about a drop in
Libyan crude exports.
Brent crude for December delivery was up a single
cent at $105.92 a barrel. U.S. oil for December delivery
added 3 cents to $94.64.