CMC Markets Weekly Report

Stocks in the U.S. closed well off their lows Friday, but the S&P 500 and Nasdaq still logged their worst one-week declines this year, pressured by a disappointing March unemployment report in addition to ongoing jitters over North Korea.

The Dow Jones Industrial Average declined 40.86 points to close at 14,565.25, cutting most of its losses after being down more than 170 points at its session low. The S&P 500 slipped 6.70 points to finish at 1,553.28 whilst the Nasdaq fell 21.12 points to end at 3,203.86.

U.S. employers hired at the slowest pace in nine months in March, adding just 88,000, while the unemployment rate notched lower to 7.6 percent, largely due to people dropping out of the work force, according to the Labour Department. The unemployment rate is the lowest since December 2008, while the labour force participation rate is at the lowest since 1979. Analysts polled by Reuters had expected a gain of 200,000.

Earlier this week, private sector employment and jobless claims data indicated weakness in the labour market. Reports on the manufacturing and services sectors also disappointed.

Adding to fears, geopolitical tensions remained in focus after North Korea placed two of its intermediate range missiles on mobile launchers and hid them on the east coast of the country, according to South Korean media. In addition, North Korea asked several foreign embassies including Russia to consider evacuating staff from Pyongyang because of increasing tension.

Also on the economic front, the U.S. trade gap narrowed unexpectedly to $43 billion in February, from an unrevised $44.5 billion in January, as crude oil imports fell to their lowest level since March 1996 and overall exports increased slightly, according to the Commerce Department. Economists surveyed by Reuters expected the gap to widen to $44.6 billion.

Consumer credit rose by $18.14 billion in February to $2.799 trillion and January was revised to show a smaller jump than previously expected, according to the Federal Reserve.

In commodity markets, Gold rallied over 1.5 per cent on Friday, its biggest one-day gain since November, as disappointing U.S. job data fuelled expectations the Federal Reserve will continue its bond buying program.

Gold accelerated gains throughout the session on the payrolls data and was up 1.7 per cent at $US1,579.60, having earlier hit a high at $US1,580.80.

Copper fell on Friday to within sight of the eight-month lows it hit on Thursday, after far weaker than expected US jobs data spooked investors about the state of the world's largest economy.

Three-month copper on the London Metal Exchange slid to a session low of $US7,384 a tonne following the US data before paring losses to close at $US7,406, a decline of 0.5 percent.

Brent crude futures fell 2 percent on Friday as a weak U.S jobs report fuelled concerns about the economy of the world's largest oil consumer.

Brent crude fell $US2.22, or 2.09 per cent, to settle at $US104.12 a barrel, having fallen as low as $US103.62. U.S crude settled at $US92.70 off an earlier low of $US91.91 a barrel.

In the week ahead, the US will see wholesale trade on Tuesday and the minutes of the Fed meeting on Wednesday. Thursday brings chain store sales and Friday retail sales along with business inventories, the PPI and consumer sentiment.

China will release its all important inflation data for March on Tuesday. Another jump in CPI would restrict the capacity of the new regime in Beijing to continue with fiscal stimulus. China's March trade balance is released on Wednesday.

Locally today, the ANZ will release its data on March job advertisements and the Australian Industry Group and Housing Industry Association will release data on the performance of the construction industry in March. Tuesday, sees the release of NAB business confidence survey and the Westpac consumer confidence survey on Wednesday and Thursday rounds of the week with our own jobs numbers.