* Asian investors in cautious mood after soft finish on Wall
* US jobs report looms as big test of recovery hopes
* Euro lower as ECB steps up easing rhetoric, stops short of
By Wayne Cole
SYDNEY, April 4 Asian markets put discretion
before valour on Friday as investors counted down the final
hours to the U.S. jobs report, while the euro nursed a grudge
after the European Central Bank opened the door to more
aggressive easing, albeit not just yet.
With virtually no major data of note due in Asia, moves were
minor across the region. Australia's share market inched up 0.2
percent, while MSCI's broadest index of Asia-Pacific
shares outside Japan barely budged.
Japan's Nikkei eased a fraction, with a softer yen
providing some support, while Shanghai rose 0.2 percent.
Wall Street had been no livelier, with the Dow ending
flat and the S&P 500 off 0.11 percent. On Friday, the S&P
500 E-Mini contract was just a whisker firmer.
The March U.S. payrolls report looms as a major test to the
argument that the economic weakness of January and February was
due to bad weather and the recovery is still on track.
Median forecasts are for a rise of 200,000 in payrolls,
though dealers say the whisper number in markets is now
something nearer 220,000. A result around there should reassure
the optimists and tend to underpin the dollar and stocks.
Perversely a much stronger read might not be so positive for
shares since it could reignite speculation of an earlier rate
hike from the Federal Reserve.
Likewise, a weak number would likely hurt the dollar and
boost Treasuries, but the impact on equities might be tempered
by expectations monetary policy would stay loose for longer.
Thursday's U.S. numbers were too mixed to draw any
conclusions on the outlook for policy.
The ISM measure of service sector activity bounced to 53.1
in March, and while it was slightly below forecasts it did show
a welcome recovery in employment intentions.
However, data also showed an unexpected widening of the U.S.
trade deficit which implied net exports were a much bigger drag
on the economy last quarter than first thought. Indeed, RBS
halved their forecast for growth to just 0.6 percent annualised.
NOT NOW, BUT MAYBE SOMETIME
In Europe, the ECB took no new action, as was widely
expected, but President Mario Draghi was at pains to emphasise
the central bank's willingness to act if inflation stayed low.
Crucially, Draghi declared the policy making council was
"unanimous" on using unconventional easing if needed. That
marked a major change as some countries, notably Germany, have
long opposed steps such as quantitative easing.
European bond yields fell as a result and even Greek 30-year
bond yields slipped below 6 percent for the first
time since the global financial crisis.
That in turn dragged down the euro to a five-week trough at
$1.3698, and left it at $1.3708 on Friday.
The setback in the euro saw the dollar index climb to
its highest level since Feb 27. The greenback also extended
gains on the yen, popping above 104.00 for the first time
since Jan 23. It last traded at 103.90 yen.
In commodities markets, one of the few movers was aluminium
which was on track for its biggest weekly gain in more
than eight months as a series of capacity cutbacks by top
producers underpinned the market.
Spot gold was pinned at $1,286.89 an ounce, and still
uncomfortably close to the two-month trough of $1,277 touched
early this week.
Brent steadied at $106.19 a barrel after a bounce of
1.4 percent on Thursday, while U.S. crude added 15 cents
to $100.44 a barrel.
(Editing by Shri Navaratnam)