US congressional leaders struggled over the weekend to come up with a plan to prevent the government defaulting on its debt payments and to allow government social security payments to continue to made.

European shares rose on Friday following the successful bail-out deal for Greece. The FTSEurofirst index rose by 0.5pct while the German Dax was up by 0.5pct and the UK FTSE rose by 0.6pct. The FTSEurofirst index rose by 2.0pct last week.

US sharemarkets finished mixed on Friday. The Dow Jones ended lower, dragged down by shares in Caterpillar (shares down 5.8pct) after the equipment giant reported earnings that missed market expectations. But other key indices ended higher. The Dow Jones fell by 43pts or 0.3pct with the S&P 500 up by 0.1pct and the Nasdaq lifted 24pts or 0.9pct. Over the week the Dow rose by 1.6pct and the S&P 500 gained 2.2pct while the Nasdaq rose by 2.5pct.

US treasuries rose on Friday (yields lower) as investors focussed on the inability of the White House and Congress to secure a deal to raise the debt ceiling. US 2yr yields fell by 1pt to 0.391pct and US 10yr yields fell by 5.3pts to 2.964pct. Over the week US 2yr yields rose by 4pts. US 10yr yields rose by 5.7pts.

Major currencies were mixed against the greenback in European and US trade on Friday. The Euro fell from US$1.4435 to US$1.4325, ending the US session at US$1.4355. The Euro is at US$1.4380 this morning. The Aussie dollar rose from US108.30c to US108.75c, ending US trade near US108.40c. And the Japanese yen strengthened from 78.70 yen per US dollar to JPY78.30, before ending US trade near JPY78.50. The yen has lifted to JPY78.15 this morning.

Benchmark crude oil prices rose on Friday. The European bail-out plan boosted investor confidence, underpinning gains in European equities and commodity prices. But investors remained watchful over the lack of agreement on the US debt ceiling. Nymex crude oil rose by US74c or 0.7pct to US$99.87 a barrel and London Brent crude rose by US$1.16 to US$118.67 a barrel. Nymex was higher over the week by $US$2.63 or 2.7pct and Brent rose by 1.2pct.

Base metal prices were mixed on the London Metal Exchange on Friday. Lead lost 0.3pct and copper lost 0.1pct and tin was flat. Other metals rose 0.1-2.0pct. Over the week metal prices were mixed. Lead lost 1.0pct and nickel fell 0.8pct but other metals rose up to 5pct led by zinc followed by aluminium and tin. And the gold price rose again on Friday to near record highs on continued inaction on the US debt ceiling. Comex gold rose by US$14.50 an ounce to US$1,601.50. Gold rose by US$11.40 or 0.7pct last week.

Ahead: In Australia, data on producer prices is released. Reserve Bank Assistant Governor Malcolm Edey delivers a speech. Harvey Norman releases sales figures. In the US, no major economic data is scheduled. Earnings are expected from Kimberly-Clark and Texas Instruments.