The highly anticipated US labor report sparked further losses in the equity markets, oil and commodities while pushing the dollar sharply higher against the majors. The greenback surged against the euro, pushing the single currency below the 1.36-level for the first time since May 2009 at 1.3587 and advancing to an 8-month high versus the pound to 1.5564. The US equity markets extended its slide with the Dow Jones breaching the 10,000-mark, losing more than 1.5% to 9,848 and the S&P 500 plummeting by over 1.7% to 1,045. Meanwhile, crude oil traded below the $70-per barrel mark while spot gold tumbled to $1,050.

The January non-farm payrolls figure missed estimates for an improvement to +15k, instead revealing a loss of 20k jobs compared with a downwardly revised 150k jobs shed in December. The prior revisions to non-farm payrolls lifted the tally of jobs lost to 8.4 million since the beginning of the recession in December 2007. The unemployment rate unexpectedly fell from its worst levels since 1983, beating calls to stand pat at 10.0%, instead dipping to 9.7% -- a five month low.

Heightened risk-aversion largely dictated the direction of the markets as global equity indexes faltered on the Friday session amid renewed worries over the strength of the economic recovery. Further, burgeoning fears over fiscal deficits will continue to loom with Moody’s rating agency warning this week that the US debt rating could be negatively affected if the government doesn’t take steps to trim the deficit.

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