LONDON - Markets were steady Monday as investors shrugged off weak U.S. employment figures ahead of a slew of earnings statements from leading U.S. banks.
Last Friday's figures showing that the U.S. economy added 74,000 workers in December -- the smallest increase since
January 2011 -- failed to have much of a market impact as many investors blamed
the bad weather for the disappointment.
And at the margins, many think the figures may mean the Federal Reserve doesn't wind down its monetary stimulus as fast as many have predicted. The stimulus over the past few years has helped shore up stocks in particular as the new money created found its way into financial markets.
The Fed has been buying $85 billion of
financial assets each month to force down interest rates and spur economic
growth. In December, the Fed said it would reduce its purchases by $10 billion
per month to $75 billion beginning this month due to an improving economy.
"The belief that Friday's numbers
could see a pause in tapering until March do appear to be reflected in U.S.
bond markets, with the biggest one day fall in yields in the 10 year note since
September last year, closing over 11 basis points down on the day," said
Michael Hewson, senior market analyst at CMC Markets.
That drop helps explain the fairly
muted reaction in stock markets as well as the weakness of the dollar.
In Europe, the FTSE 100 index of
leading British shares was flat at 6,739 while the CAC-40 in France rose 0.1
percent to 4,253. Germany's DAX was 0.2 percent higher at 9,487.
Wall Street was poised for modest declines at the open with Dow futures down 0.1 percent and the broader S&P 500 futures 0.2 percent lower.
The dollar fell sharply in the wake of the jobs figures and continued to be under pressure Monday, particularly against the yen. The dollar was a further 0.6 percent lower at 103.36 yen. It was holding up better against the euro, which surged Friday. Europe's single currency was down 0.1 percent $1.3665.
The focus in markets this week will
increasingly turn to U.S. earnings statements over the coming weeks. This week,
the banks take center stage.
"As we saw in the previous
quarter, this is expected to be the best performing sector in this earnings
season, which should mean earnings season getting off to a very positive
start," said Craig Erlam, market analyst at Alpari.
Earlier in Asia, Hong Kong's Hang Seng
index added 0.2 percent to 22,888.76 and Seoul's Kospi rose 0.5 percent to
1,948.92. China's benchmark Shanghai Composite Index shed 0.2 percent to
2,009.5. Tokyo was closed for a holiday.
Thailand's SET index gained 1.1
percent despite street protests by anti-government activists aimed at shutting
down swathes of Bangkok and forcing the Thai prime minister from office.
Analysts warned the Thai economy and currency could suffer if the protests