|
 Crucially, the new head of the Federal Reserve, Janet Yellen,
delivers her first testimony to the House on Tuesday and the Senate
on Thursday, and markets will be hoping for reassurance that policy
will stay loose for a long time to come.
Japan's Nikkei crept ahead 1 percent on Monday to reach 14,650,
moving away from last week's trough at 13,995.
MSCI's broadest index of Asia-Pacific shares outside Japan inched up
0.2 percent, while Australian stocks added 0.7 percent.
Markets took their cue from Wall Street where the Dow ended Friday
up 1.06 percent and the S&P 500 1.33 percent. The pan-European
FTSEurofirst 300 had also risen 0.75 percent.
Japanese shares found further comfort in a softening yen with the
dollar pushing up to 102.45 but meeting resistance around 102.60.
The dollar was also a shade firmer on the euro at $1.3620, against
$1.3635 late Friday.
Both stocks and the dollar had initially retreated when the U.S.
payrolls report showed a rise of only 113,000 in January, well short
of forecasts.
However, the damage was limited by a very strong household survey
where a sharp jump in the number of people employed nudged the
jobless rate down to 6.6 percent.
The mixed bag left Treasuries little changed with yields on 10-year
notes a shade lower at 2.68 percent.
In commodities, oil prices extended their recent gains as
persistently cold weather across the U.S. continued to eat into
heating fuel stocks.
U.S. crude rose 27 cents to $100.14 a barrel, having reached its
highest in six weeks, while Brent crude oil futures were steady at
$109.55 a barrel.
Spot gold was also firm at $1,265.55 an ounce, but faces stiff
resistance from $1,273 to $1,278.
YELLEN TESTIFIES
Fed Chair Yellen will be able to offer her own read of the jobs
report before lawmakers this week.
Analysts generally assume she will stick to the script of recent
policy meetings, reiterating that further gradual decline in asset
buying is likely as long as the economy continues to improve as
assumed.
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"We expect her to state that tapering is not on a preset course and
the committee will adjust course as needed, particularly if the
expected firming in growth and gains in payrolls do not persist,"
wrote analysts at Barclays in a note.
Yellen is also likely to repeat the standard forward guidance
that the funds rate will remain near zero until the unemployment
rate falls well below 6.5 percent, so long as inflation is subdued.
Major U.S. data includes retail sales on Thursday where a flat
result is forecasts due partly to bad weather and a rise in petrol
prices.
In Asia, China releases trade numbers on Wednesday and consumer
prices on Friday. Analysts at Commonwealth Bank of Australia predict
exports will have shrunk in January but mainly because of
significant base effects as January last year saw an outsized 25
percent increase.
Trade flows can be very volatile in January and February due to the
timing of the Lunar New Year holiday.
The euro zone releases its first estimate of economic growth on
Friday and forecasts favor a slim 0.2 percent increase in the fourth
quarter, which would keep pressure on for more action from the
European Central Bank.
ECB President Mario Draghi gives a speech on "Progress Through
Crisis?" on Wednesday and markets will be sensitive to any hint of
further accommodation to come.
Across the Channel, the Bank of England issues its February
Inflation Report on Wednesday which will likely show muted prices
pressures and so support the outlook for low rates.
(Editing by Shri Navaratnam and Eric
Meijer)
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