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The US job market indicator, ADP National Employment report, showed companies added fewer employees in February 139,000 than estimated 155,000, and the January number was revised lower from 127,000 to 175,000.
A separate ISM’s non-manufacturing showed service industries slowed in February. While the harsh weather might have contributed to some of these, it is difficult to ignore the fundamental weakness.
In Asia, the possible default from China remains as a headliner. Shanghai Chaori Solar Energy Science & Technology Company has an interest payment of $14.7m due for tomorrow and said it may not be able to meet the deadline.
This has been the focal point for investors for the past three days, with heavy weights in the financial markets like George Soros weighing in. Comparisons have been made to the Lehman saga; however given the small scale of this debt it is unlikely to unravel to that level. The bigger issue is the possible further defaults in the Chinese corporate debt market.
Chinese equity indices were laggards yesterday on this news while investors dismissed the government’s GDP forecast of 7.5% for this year. The speculation from the announcement is Chinese leaders will allow growth to outweigh their ballooning debt of $21 trillion.
Asian indices will have a mixed day while investors digest the geopolitical tensions, weakness in US economic data and stress in the Chinese bond market.