By Wayne Cole
SYDNEY (Reuters) - Asian markets were set for guarded gains on Monday encouraged that Wall Street was able to weather a seemingly disappointing U.S. jobs report, though there is more than enough event risk ahead to keep investors on their toes.
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.
Early Monday, MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> inched up 0.16 percent, while Australia's market <.AXJO> added 0.6 percent. Nikkei futures pointed to a moderate gain at the open.
Markets took their cue from Wall Street where the Dow gained 1.06 percent <.DJI> and the S&P 500 <.SPX> 1.33 percent. The pan-European FTSEurofirst 300 <.FTEU3> rose 0.75 percent and MSCI's all-country stock index <.MIWD00000PUS> 1.2 percent.
Japanese shares should also find comfort in a softening yen with the dollar pushing up to 102.58 and probing 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 employed nudging 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 2.69 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 35 cents to its highest in five weeks at $100.29 a barrel, while Brent crude oil futures were steady at $109.54 a barrel.
Spot gold was also firm at $1,269.25 an ounce, but faces stiff resistance from $1,273 to $1,278.
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.
"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)