MORNING REPORT
(6am AEST)

The key German Ifo business sentiment index rose for the sixth straight month in April, up 0.1 point to a 9-month high of 109.9.

The number of mobile phone users in China rose by 32.57 million to 1.02 billion in the first quarter of this year, the official Xinhua news agency reported Saturday, citing figures from the Ministry of Industry and Information Technology.

European shares rose on Friday in response to another lift in the German Ifo index and solid earnings from Microsoft and General Electric. The benchmark FTSEurofirst 300 index rose by 0.5pct with the German Dax up 1.2pct and UK FTSE higher by 0.5pct. The Euro STOXX 50 volatility index fell by 7.3pct. Over the week the FTSEurofirst 300 index posted its best gain in a month, up by 1.8pct.

US sharemarkets ended mixed on Friday. The Dow Jones rose by 65pts or 0.5pct with the S&P 500 up by 0.1pct while the Nasdaq lost 7pts or 0.2pct. Shares in Apple fell 2.4pct, weighing on the Nasdaq. Shares in Microsoft rose 4.5pct on a better-than-expected earnings result. Over the week the Dow rose by 1.4pct with the S&P 500 up 0.6pct but the Nasdaq lost 0.4pct.

US treasuries were little changed on Friday. While equities and commodities rose, traders weren´t keen on adopting new positions ahead of the Federal Reserve meeting. US 2yr yields were flat at 0.27pct and US 10yr yields fell by 1pt to 1.96pct. Over the week US 2yr yields were flat and US 10yr yields fell by 2pts.

Major currencies rose against the greenback in European and US trade on Friday. The Euro rose from lows around US$1.3130 to highs near US$1.3225 and ended US trade at US$1.3220. The Aussie dollar rose from lows around US103.15c to US103.85c and ended US trade near US103.80c. And the Japanese yen lifted from 81.77 yen per US dollar to JPY81.46 and ended US trade near JPY81.54.

Benchmark crude oil prices rose on Friday in response to an encouraging result on German business sentiment. Expiring US Nymex May crude rose by US78c or 0.8pct to US$103.05 a barrel and rose 22c on the week. And London Brent crude rose by US76c to US$118.76 a barrel but was down 2.5pct on the week.

Base metal prices were firmer on the London Metals Exchange on Friday in line with stronger equity markets. Metals rose between 0.4-2.4pct with lead doing best and aluminium faring the worst. Over the week metals were mixed. Tin lost 3.2pct and nickel lost 2.8pct but other metals rose between 0.6-2.3pct. And the gold price rose slightly with the June Comex gold futures price up just US$1.40 or 0.1pct to US$1,642.80 an ounce. Reuters reports that appetite for physical gold in India has been weak ahead of the gold-buying festival of Akshaya Tritiya on Tuesday. Gold was down 1pct over the week after being up 1pct in the previous week.

Ahead: In Australia, the producer price index is released together with State of the States report. In China the flash reading on the HSBC purchasing managers index is released. In the US no major economic data is scheduled.