Market sentiment was broadly mixed last week as the markets opened to a short trading week.

Although Monday saw a bank holiday across most of Europe, the U.S. ISM manufacturing data showed a modest decline.

The services sector was also marked by a slowdown leading to speculation that the U.S. first quarter GDP might have slowed.

Trump’s trade war narrative continued with China hitting back at the U.S. with second round of sanctions that included pork exports as well as some aircraft parts from the U.S.

Among the central bank meetings this week, the RBA was seen holding interest rates steady.

March payrolls data disappoints

The monthly payrolls report for the month of March saw the U.S. economy adding a meagre 103,000 jobs in the month of March.

Economists polled were expecting to see around 188k jobs added during the month.

The payrolls data disappointed and came as a surprise after earlier in the week, the ADP payrolls data showed a solid uptick in the private sector jobs.

Data from the U.S. department of labor showed that the number of jobs added marked the smallest pace of gains in over six months and comes as February’s payrolls data was revised higher to show 326,000 jobs being added, making February’s payrolls one of the strongest so far.

The U.S. unemployment rate was seen unchanged at 4.1% for the year ending March 2018 and was below estimates of economists forecasts of 4.0%.

Despite the weakness in the jobs report, data showed that employers only had to add 80k jobs on average during the month for the unemployment rate to be stable.

Data for the first three months of the year showed that employers on average added 202k workers to payrolls per month on average. This was higher than the 2017’s monthly average of 182,000.

Wage growth was also seen coming out weaker with the average hourly earnings seen rising just 2.7% in March compared to the year before. This was consistent with the annual gains in recent months.

The labor force participation rate was also seen shrinking by 0.1 percentage points to 62.9% during the reported month.

BoJ Tankan Manufacturing survey slips to 2-year low

The Bank of Japan released its quarterly Tankan manufacturing and non-manufacturing index data last week.

According to official data, sentiment among big firms in Japan slipped to a two year low for the period ending March 2018.

This came amid the fact that firms were cautious on the rising exchange rate of the Japanese yen and the uncertainty on the global trade due to the measures announced by the U.S. President Trump.

The Tankan manufacturing index business confidence was seen falling to 24 in the quarter ending March.

This was lower than the previous reading of 25 that was registered in the quarter ending December.

The indicator for non-manufacturing index fell two points to 23 in March quarter.

The business outlook for both the large manufacturing and non-manufacturing firms fell to 20 in the first quarter of the year.

Despite the modestly weaker than expected data, firms said that investment would likely rise 2.3% in the fiscal year of 2018.

This was based on the assumption that firms expect the exchange rate of the U.S. dollar to average around 109.5 yen.

The survey was conducted at a time when the Japanese yen was seen steadily rising and there was also a significant volatility in the equity markets as investors panicked that the Federal Reserve would hike rates at a much faster pace.

Trade talks also started to gain momentum around the same period which culminated with the U.S. President Trump slapping tariffs on steel and aluminum imports including that from Japan.

Firms stayed cautious as they expected the tariffs imposed by the U.S. to snowball into a full blown global trade war.