US employment (non-farm payrolls) rose by just 18,000 people in June - well short of forecasts centred on a jobs gain of 90,000. Private sector jobs rose by 57,000. The unemployment rate edged up from 9.1pct to 9.2pct. Hourly earnings were flat and average hours eased from 34.4 to 34.3 hours.

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European shares fell on Friday as investors focussed on the weak US jobs data. The FTSEurofirst index fell by 0.8pct with the German Dax lower by 0.9pct and the UK FTSE down by 1.1pct. The FTSEurofirst index fell 0.4pct last week.

US sharemarkets fell on Friday but losses were pared back sharply in late trade as investors prepared for the start of earnings season. As a result, shares posted their second weekly advance. Bank stocks led the declines with Bank of America down 2pct. The Dow Jones fell by 62pts or 0.5pct after earlier being down as much as 152 points. The S&P 500 ended lower by 0.7pct and the Nasdaq lost almost 13pts or 0.5pct. Over the week the Dow rose by 0.6pct and the S&P 500 gained 0.3pct while the Nasdaq rose by 1.6pct.

US treasuries rose sharply on Friday (yields lower) as investors questioned whether the weak US jobs data signalled a renewed downturn for the broader economy. US 2yr yields fell 8pts to 0.39pct and US 10yr yields fell by 12pts to 3.03pct. Over the week US 2yr yields fell by 9pts and US 10yr yields lost 15pts.

Investors gravitated to safe-haven currencies like the US dollar and Japanese yen after the disappointing US jobs data. The Euro fell from highs near US$1.4360 to US$1.4215, before recovering some ground in US trade to end the session at US$1.4265. The Aussie dollar fell from highs near US107.85c to US107.05c and ended US trade near US$1.0755. And the Japanese yen strengthened from 81.45 yen per US dollar to JPY80.50, before easing in US trade to end the session near JPY80.60.

Benchmark crude oil prices fell on Friday as investors fretted that the weaker-than-expected employment gains would translate into slower demand for gasoline and other oil products. Nymex crude oil fell by US$2.47 to US$96.20 a barrel and London Brent crude fell by US26c to US$118.33 a barrel. Despite the falls on Friday, oil was higher over the week with Nymex up by 1.3pct and Brent higher by 5.9pct.

Base metal prices were lower on the London Metal Exchange on Friday in response to the weak US jobs data. Tin lost 2.7pct with zinc down 2.4pct and aluminium dropped 2.2pct. Other metals eased up to 0.8pct. Over the week metal prices were generally higher, except lead, down 0.5pct. But tin rose 4.6pct with nickel up 3.8pct and other metals up 1.3-2.3pct. The gold price rose on Friday in response to safe-haven demand with Comex gold higher by US$11.00 an ounce or 0.7pct to US$1,541.60. Gold rose by US$59.00 or 4.0pct last week.

Ahead: In Australia, housing finance data is scheduled. In the US, no major economic data is scheduled. Alcoa kicks off the earnings season, issuing its latest profits figures.

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