MORNING REPORT
(7am AEDT)

US consumer sentiment rose from 74.3 to a 13-month high of 76.2 in March - well above forecasts of a result near 74.7. US personal income rose 0.2pct in February with spending up 0.8pct - largest gain in seven months. The Chicago purchasing managers' index eased from 64.0 to 62.2 in March.

China´s official purchasing managers' index rose from 51.0 to an 11-month high of 53.1 in March.

European shares rose for the first time in four days. Euro zone finance ministers agreed to boost rescue funds to member nations and US economic data was encouraging. The benchmark FTSEurofirst 300 index rose by 0.9pct and was up by 6.6pct in the quarter - the best quarterly gain in five years. The German Dax rose by 1.0pct on Friday and the UK FTSE rose 0.5pct.

US sharemarkets were mixed on Friday as fund managers engaged in end-quarter window dressing. But positive spending data drove interest in consumer stocks. At the close, the Dow Jones was up by 66pts or 0.5pct with the S&P 500 up by 0.4pct but the Nasdaq lost 3.8pts or 0.1pct. The broader S&P 500 index rose by 12pct over the quarter - the best start to a year in 14 years.

US longer-term treasuries fell on Friday (yields higher) in response to firmer US economic data. Investors continue to shift from bonds to equities and commodities. US 2yr yields were steady near 0.34pct and US 10yr yields rose by 6pts to 2.21pct. Over the week US 2yr yields fell 3pts with US 10yr yields down by 2pts. Over the quarter, bonds recorded the biggest price fall in five quarters.

Major currencies were weaker against the US on Friday. The Euro fell from highs around US$1.3375 to near US$1.3310, and was close to US$1.3345 in late US trade. The Aussie dollar fell from highs around US104.15c to US103.40c and was near the lows in late US trade. And the Japanese yen eased from 81.85 yen per US dollar to JPY82.88 and was near JPY82.79 in late US trade. The Aussie has jumped to US104.4c this morning with Euro at US$1.3355 and Japanese yen at JPY83.05 per USD.

Benchmark crude oil prices rose modestly on Friday. Encouraging US economic data and the continued threat of supply disruptions from Iran were weighed against a stronger US dollar. The US Nymex rose by US24c or 0.2pct to US$103.02 a barrel while London Brent crude rose by US49c to US$122.88 a barrel. Nymex rose by 4.2pct over the quarter while Brent gained 14.4pct - the biggest gain in a year.

Base metal prices were mixed on Friday as fund managers engaged in end quarter window dressing. Aluminium fell 0.3pct and zinc lost 0.2pct but other metals rose with nickel up 4.0pct. Over the week metals were also mixed with aluminium down 2.2pct and nickel down 1.9pct but other metals rose. The gold price rose on Friday in line with other commodities and equities. The June Comex gold price was up by US$17.00 or 1.0pct to US$1,671.90 an ounce. Over the week, gold rose by 0.6pct. Over the quarter spot gold rose 6.5pct but platinum rose 17pct and silver rose 16pct.

Ahead: In Australia, the RP Data/Rismark home value index is released together with building approvals, the monthly inflation gauge and Performance of Manufacturing index. In the US, the ISM manufacturing index and construction spending data are released.