US non-farm payrolls rose by 216,000 in March - the largest increase in ten months. The private sector accounted for all the jobs, adding 230,000 positions. The unemployment rate fell to a 2-year low of 8.8pct. The average work week was steady 34.3 hours.

US construction spending fell by a larger than expected 1.4pct in February to $760.6 billion - its lowest level since 1999. The January result was revised to shower a larger 1.8pct drop than the previously reported 0.7pct decline. The result highlighted the sustained weakness in the housing sector. US manufacturing printed in line with analyst expectations easing from 61.4 to 61.2 in February.

European shares rallied to near three-week highs on Friday. Financial stocks were amongst the top performers after the Irish bank stress test and announcement by Ireland´s finance minister that it would be unwise to impose losses on senior bondholders at banks. The bank of Ireland gained 38.6pct while Allied Irish rose 8.3pct. The FTSEurofirst index rose 1.5pct, the German Dax gained 2.0pct and the UK FTSE rose 1.7pct.

US sharemarkets rallied on Friday, after the strong employment data supported the view that the global recovery was on track. The Dow Jones index rose 60pts or 0.5pct with the S&P 500 gained 0.5pct with the Nasdaq up 9pts or 0.3pct. For the week the Dow gained 1.3pct, the S&P 500 rose 1.4pct and the Nasdaq was up 1.7pct.

US treasuries rallied (yields lower) on Friday as traders bet that despite the upbeat employment data the Fed was unlikely to move on interest rates in the near term. US 2yr yields fell 4pts to 0.80pct and US 10yr yields lost 3pts to 3.45pct.

The Euro rallied against the greenback supported by expectations the ECB will be raising interest rates when they meet on Thursday. The Euro rose from lows near US$1.4065 to highs around US$1.4240 and closed US trade near US$1.4230. The Aussie dollar rose from lows near US103.20c to US103.95c, ending US trade near its highs. And the Japanese yen traded between 83.40 yen per US dollar and JPY84.70, ending US trade near JPY84.05.

US crude oil prices rallied as the positive jobs data reinforced economic growth expectation while Libya´s ongoing conflict kept supply threats in focus. The Nymex crude oil contract rose by US$1.22 or 1.1pct to US$107.94 a barrel. And London Brent crude rose US$1.34 to US$118.70 a barrel. For the week Nymex crude rose 1.1pct while London Brent gained 2.7pct.

Base metal prices were mostly weaker on the London Metal Exchange, on rising LME inventories. The exception was zinc (up 1.4pct). And the gold price fell with the Comex gold futures price down US$11.00 or 0.8pct to US$1428.90.

Ahead: In Australia, the TD inflation gauge, ANZ job advertisements and the PSI are released. In the US, no economic data is released.

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