Australian Stock Market - Morning Report 09/05/2011
US non-farm payrolls (employment) were unchanged in August, well below forecasts for a 70,000 lift in jobs. Private payrolls rose by 17,000 and hourly earnings fell by 0.1pct. But the household survey showed a 331,000 lift in jobs and the unemployment rate was unchanged at 9.1pct.
European shares fell sharply on Friday, weighed down by weak US jobs data and notification from Greece that it will miss its budget forecast this year. The FTSEurofirst index fell by 2.5pct while the German Dax lost 3.4pct and the UK FTSE lost 2.3pct.
US sharemarkets fell on Friday as the weaker-than-expected jobs data prompted investors to book profits and square positions before the long weekend. The Dow Jones fell by 253pts or 2.2pct with the S&P 500 down by 2.5pct and the Nasdaq lost 65.7pts or 2.6pct. Over the week the Dow fell by 0.4pct and the S&P 500 lost 0.2pct while the Nasdaq was largely flat.
US long-term treasury yields fell on Friday (prices higher) in response to weak US jobs data and sharp declines on equities and commodities markets. US 2yr yields rose by 1.6pts to 0.204pct but US 10yr yields fell by 14pts to 1.99pct. Over the week US 2yr yields were up 1pt while US 10yr yields fell by 20pts.
The US dollar strengthened against the Euro and commodity currencies after the release of the US employment data. The Euro rose over the European session from near US$1.4210 to US$1.4285, before easing to US$1.4185 over the US session and ending trade near US$1.4200. The Euro has fallen to US$1.4165 this morning. The Aussie dollar fell from highs around US107.20c to US106.20c, ending US trade near US106.40c. The Aussie is near US$1.0615 this morning. And the Japanese yen held in a tight range from 76.90 yen per US dollar to JPY76.60 before ending US trade at JPY76.80.
Global crude oil prices fell on Friday after weak US jobs data raised concerns about future oil demand. However investors are also closely watching the progress of Tropical Storm Lee near New Orleans. Nymex crude oil fell by US$2.48 or 2.8pct to US$86.45 a barrel and London Brent crude fell by US$1.96 or 1.7pct to US$112.33 a barrel. Nymex was up by 1.3pct over the week with Brent up 0.9pct.
Base metal prices fell on the London Metal Exchange on Friday in response to weaker US jobs data. Metals fell up to 3.5pct with lead faring the worst. Over the week metal prices were mixed with aluminium up 2.4pct and tin up 1.9pct while zinc lost 2.3pct. Other metals were little changed. But the gold price rose on Friday as investors again embraced safe-haven assets. The Comex December gold price was up by US$47.80 an ounce or 2.6pct to US$1,876.90. Gold rose by US$79.60 or 4.4pct over the week after falling by 3.0pct the previous week.
Ahead: In Australia, ANZ job ads, the ABS Business Indicators series, Performance of Services and TD Securities monthly inflation gauge are released. In the US, markets are closed for the Labor Day holiday.