US retail sales rose by 0.4pct in July, following a revised 0.3pct drop in June. The July result was marginally below forecasts for a gain of 0.5pct. Excluding autos and gasoline, sales rose fell by 0.1pct. US consumer sentiment rose from the final June reading of 67.8 to 69.6 in July.

US consumer prices rose by 0.3pct - marking the first rise in four months. In annual terms consumer prices rose by 1.2pct - in line with market expectations. US business inventories rose by 0.3pct in June to their highest level in a year. On the flipside US business sales fell 0.6pct in June - suggesting consumer demand may have weakened more than businesses had anticipated.

European shares recorded a second straight session of gains on Friday. Euro-zone GDP rose from 0.2pct in the March quarter to 1pct in the June quarter- marking the fastest pace of growth in more than three years. German GDP recorded a 2.2pct annual rate - well ahead of forecasts. The FTSEurofirst index rose by 0.3pct with the UK FTSE up by 0.4pct while the German Dax fell by 0.4pct.

US sharemarkets fell for the fourth straight session, as weak economic data had investors concerned about a stalling economy. At the end of trade the Dow Jones was lower by almost 17pts or 0.2pct with the S&P 500 down 0.4pct and the Nasdaq lost 17pts or 0.8pct. For the week, the Dow fell 3.3pct, while the S&P lost 3.8pct and the Nasdaq lost 5pct.

US treasuries rallied on Friday (yields lower) as the weaker than expected data on inflation and consumer spending supported a bid for treasuries. US 2yr yields fell 2pts to 0.53pct and US 10yr yields lost 7pts to 2.68pct. Over the week US 2yr yields rose by 2.3pts and US 10yr yields fell by 14.9pts.

Major currencies weakened against the US dollar in Friday trade. The Euro fell from highs near US$1.2900 to around US$1.2750, ending US trade near its lows. The Aussie dollar fell from highs near US90.30c to US89.20c, ending US trade near US89.30c. And the Japanese yen traded between 85.60 yen per US dollar and JPY86.30, ending US trade near JPY86.20.

US crude oil prices fell for a fourth straight day. The monthly OPEC report expected oil demand to remain sluggish over the rest of 2010 and into 2011. The Nymex crude oil contract fell by US35c or 0.5pct to US$75.39. US London Brent crude fell by US41c to US$75.11 a barrel. For the week Nymex crude lost 6.6pct.

Base metal prices were lower on the London Metal Exchange on Friday. Aluminium lost 2.5pct while other metals fell between 0.4-2.1pct. And the Comex gold price remained largely flat. Comex gold closed down by US10c an ounce to US$1,216.60.

Ahead: In Australia, new car sales data is expected. In the US the empire manufacturing survey and NAHB housing market index is released.