* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Asia reluctant to follow Wall St higher
* White House denies delay in Mexico tariffs
* U.S. payrolls seen +185,000 but risks on downside
By Wayne Cole
SYDNEY, June 7 (Reuters) - Asian share markets dithered on
Friday as investors waited for concrete signs of progress in the
U.S.-Mexican trade standoff, while bracing for a U.S. jobs
report that could sway the course of interest rates there.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS edged 0.04% higher and looked set for another
cautious session being up just 0.6% for the week so far.
Japan's Nikkei .N225 firmed 0.3%, but South Korea .KS11
slipped 0.5%. E-Mini futures for the S&P 500 ESc1 were mostly
flat.
Mexican and U.S. officials had held a second day of talks on
trade and migration on Thursday amid reports President Donald
Trump might delay the imposition of tariffs that was due on
Monday. That had helped the Dow .DJI end Thursday up 0.71%, while
the S&P 500 .SPX gained 0.61% and the Nasdaq .IXIC 0.53%.
However, the White House later said the tariffs would go
ahead as scheduled, and there were reports Trump might declare a
national emergency to dodge any Senate objections. The uncertainty kept investors from getting too bullish,
particularly with the U.S. payrolls report promising to be an
unknown quantity later in the session.
Market forecasts are for jobs to rise a solid 185,000 in May
and unemployment to stay at a low 3.6%, though much was in doubt
after dismal data on private hiring released earlier in the
week.
"We haven't adjusted our projection of 185,000 for overall
nonfarm payrolls in May," said Kevin Cummins, senior U.S.
economist at RBS.
"However, any major surprises in May payrolls seem tilted to
the low side of our forecast, which wouldn't be too surprising
given the rising uncertainty in the outlook in the U.S. and the
above-trend gain registered in April."
Oddly, a weak number might actually prove positive for
equities since it would bolster the case for an early rate cut
from the Federal Reserve.
Markets have fully priced in a cut by September, and a
further two easings by mid-2020. FEDWATCH
Two-year Treasury yields US2YT=RR were near their lowest
since December 2017 at 1.88%, having fallen 28 basis points in
just two weeks.
KILLER PUNCH
That seismic shift in Fed expectations has hampered the U.S.
dollar, which was currently down 0.7% for the week so far
against a basket of currencies at 97.020 .DXY .
The dollar has at least steadied on the yen at 108.44 JPY=
and was off the recent five-month low of 107.80.
It fared less well on the euro which was currently holding
gains of almost 1% for the week at $1.1273 EUR= .
The single currency bounced sharply overnight after the
European Central Bank pushed back the timing of any rate hike,
but failed to canvass the policy easing that many had wagered
on. Money market futures are now pricing in a 45% chance of a 10
basis point euro zone rate cut by the end of year versus 75%
before the ECB statement.
"The killer punch came at the press conference with
President Draghi disappointing market's dovish policy pricing
with a series 'optimistic' remarks," noted Rodrigo Catril, a
senior FX strategist at NAB.
"The risk is that once the ECB realises things are really
bad, it will find itself well behind the curve."
In commodity markets, all the chatter of rate cuts globally
kept gold near 15-week highs at $1,333.45 per ounce XAU= .
Oil prices regained a little ground after a rough week but
was still vulnerable to worries about global demand and
oversupply. O/R
Brent crude LCOc1 futures bounced 59 cents to $62.26, but
were still down 3.5% for the week so far, while U.S. crude
CLc1 firmed 58 cents at $53.17 a barrel.
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(Editing by Sam Holmes)