Note: Saudi Arabia was the only market to trade Saturday and Sunday. Other Middle Eastern markets were closed Friday and Saturday and responded on Sunday to big falls by US sharemarkets in late trade on Thursday. Saudi Arabia’s sharemarket ended 0.08 points higher to 6,078 on Sunday.

Meetings are currently being held by G7 nations and European Central Bank.

Reuters reports that: “The Euro system of central banks has decided to intervene decisively on markets to respond to the escalating debt crisis, a euro zone monetary source said after a European Central Bank conference call on Sunday. “

MORNING REPORT
Late on Friday night US time, ratings agency Standard and Poor´s downgraded the long-term credit rating of the United States from AAA to AA+.

US non-farm payrolls (employment) rose by 117,000 in July, well ahead of forecasts centred on a gain of 84,000. Private sector payrolls rose by 154,000. There were upward revisions to previous months data. Unemployment fell from 9.2pct to 9.1pct.

[Kick off your trading day with our newsletter]

European shares fell again on Friday with investors warily analysing moves by Italy to step up austerity measures. The FTSEurofirst index fell by 1.7pct while the German Dax was down by 2.8pct and the UK FTSE lost 2.7pct. The FTSEurofirst index fell by 9.8pct last week.

US sharemarkets ended mixed on Friday despite positive employment figures. The Dow Jones rose by almost 61pts or 0.5pct with the S&P 500 down by 0.1pct and the Nasdaq fell by 24pts or 0.9pct. Over the week the Dow fell by 5.8pct and the S&P 500 lost 7.2pct while the Nasdaq fell by 8.1pct.

US treasuries slumped on Friday (yields higher) on stronger-than-expected employment data. In the coming week US Treasury will sell US$72 billion of bonds and notes. US 2yr yields rose by 1pt to 0.29pct and US 10yr yields rose by 15pts to 2.56pct. Over the week US 2yr yields fell by 8.5pts US 10yr yields fell by 23.5pts.

Major currencies were mixed against the greenback over the European and US sessions. The Euro rose from lows near US$1.4075 to US$1.4295, ending the US session at US$1.4270. The Euro spiked to US$1.4375 this morning The Aussie dollar rose from lows around US103.75c to US105.25c, ending US trade near US104.40c. The Aussie is at US104.15c this morning. And the Japanese yen held between 78.30 yen per US dollar and JPY78.85, ending US trade near JPY78.40. The yen stands at JPY78.00 this morning.

Benchmark crude oil prices rose on Friday in response to positive US economic data, news of an Iranian pipeline explosion and a weaker greenback. A weaker US dollar improves purchasing power for buyers in Europe and Asia. Nymex crude oil rose by US25c or 0.3pct to US$86.88 a barrel and London Brent crude rose by US$2.12 to US$109.37 a barrel. Nymex was down by 9.2pct over the week with Brent down 6.3pct.

Base metal prices fell sharply again on the London Metal Exchange on Friday, down by between 3.0-5.6pct. Zinc slumped 5.6pct but aluminium was down 3.0pct. Over the week metal prices slumped between 8.1-13.4pct. Copper fell 8.1pct but tin lost 13.4pct with zinc down 11.9pct. And the gold price fell on Friday as investors booked profits to cover margin calls in equities. Comex December gold fell by US$7.20 an ounce to US$1,651.80. Gold rose by US$20.60 or 1.3pct over the week.

Ahead: In Australia, the ANZ job advertisement series is issued. JB Hi-Fi and Bendigo and Adelaide Bank release earnings results. In the US, no major economic data is released