US consumer sentiment fell from 76.0 to 66.5 in July, well below expectations of a result near 74.5. Consumer prices fell by 0.1pct in June, in line with expectations. But core inflation (excludes food and energy) rose by 0.2pct and above forecasts. The CPI is up 1.1pct on a year ago with core inflation up 0.9pct.

Bank of America reported quarterly earnings of 27c a share, above forecasts of 22c a share. Citigroup reported earnings of 9c a share (forecast 5c). And General Electric reported earnings of 30c a share above consensus of 27c.

European shares fell for a third day on Friday in response to soft US economic data. The FTSEurofirst index fell by 1.9pct with the UK FTSE down 1.0pct and German Dax lost 1.8pct.

US sharemarkets fell on Friday with investors disappointed by weak bank revenues and soft consumer sentiment data. The Dow Jones fell by 261 points or 2.5pct with the S&P 500 down 2.9pct, and the Nasdaq lost 70 points or 3.1pct. Over the week the Dow Jones fell by 1.0pct after rising 5.3pct the previous week. The S&P 500 fell 1.2pct and Nasdaq lost 0.8pct.

US treasuries rose on Friday (yields lower) in response to weak consumer sentiment data. US 2yr yields fell 2pts to 0.59pct and US 10yr yields fell 7pts to 2.93pct. Over the week US 2yr yields fell by 5pts and US 10 yr yields fell by 13pts.

Major currencies fell against the US dollar in US trade as investors took on a more defensive posture. The Euro rose from around US$1.2890 to US$1.3000 in European trade, before easing in US trade to end near US$1.2925. The Euro has eased to US$1.2905 this morning. The Aussie dollar fell from highs near US88.05c to US86.85c, ending the US session near the lows. This morning the Aussie has dropped to US86.60c. And the Japanese yen lifted from 87.30 yen per US dollar to JPY86.30 over the European session, but eased in US trade to end near JPY86.60. The Japanese yen has lifted to JPY86.45 this morning.

US crude oil prices eased modestly again on Friday as investors trimmed positions in equities and commodity markets. The Nymex crude oil contract fell by US61c or 0.8pct to US$76.01. London Brent crude fell by US72c to US$75.37 a barrel. Over the week oil fell just 8c a barrel.

Base metal prices fell between 0.7-2.9pct on the London Metal Exchange on Friday, as investors trimmed positions in equities and commodity markets. Over the week metals fell by between 1.2-5.6 pct, nearly reversing previous week gains. And the Comex gold price fell in line with other commodities, down by US$20.10 an ounce to US$1,188.20. Over the week gold fell by US$21.60 an ounce or 1.8pct.

Ahead: In Australia, import data is released. In the US, IBM and Texas Instruments report earnings.

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