Decline in US jobless claims initially boosted stocks and commodities. Gains were pared as the Kansas City Fed survey dropped in August. Trading was thin as the broad sentiment remains fragile and investors prefer to stay sidelined ahead of Bernanke’s speech at Jackson Hole. WTI crude oil price rose for a second day, closing at 73.36 after faltering below 74. Gold, on the other hand, pulled back after soaring to as high as 1246. The benchmark settled at 1237.7, down -0.29%.

Despite the volatile nature, the weekly jobless claims data in the US has been closely monitored as the country’s employment condition has shown signs of deteriorating. Initial jobless claims slipped -31K to 473K in the week ended August 21 while the reading in the prior week was revised up to 504K. Meanwhile, continuing claims fell by 62,000 to 4.456 million for the week ending August 14. While the drop in initial claims might ease concerns about the job market, it failed to signal that the present condition is improving. Economists are factoring in a drop in non-farm payrolls for the month of August.

Wall Street initially rose after the report but the strength was proved temporary. Kansas City Fed manufacturing index fell -14 points to a 12-month low of 0. Meanwhile, the new orders index slid -22 points to an 18-month low of -13. Both DJIA and S&P 500 Indices fell into the red in the afternoon and dropped -0.74% and -0.77% respectively at close.

Today in Asia, stocks and oil slide as investors worry that the Fed Chairman Ben Bernanke will express concerns regarding US economic outlook later today. In Japan, core CPI contracted -1.1% m/m in July after a -1% decline a month ago. The leading Tokyo core CPI dropped another -1.1% m/m (consensus: -1.2%), easing from -1.3% in July. Persistent deflationary pressure may press the BOJ to announce additional easing measures before the general meeting in September. The Japanese government also released the employment data which showed that unemployment rate moderated to 5.2% in July from 5.3% a month ago.

Other important data today includes US’s GDP which probably grew at annualized rate of +1.4% q/q in 2Q10, following a +2.4% expansion in the prior quarter. University of Michigan Confidence Index probably revised up to 70, from preliminary reading of 69.6, in August. In the Eurozone, Germany’s inflation is anticipated to have eased to +0.2% m/m in August from +0.3% in July.