From: Craig James, Commsec Chief Economist

MORNING REPORT (7am AEDT)

US consumer sentiment rose for the third straight month in November, rising from 60.9 to a five-month high of 64.2. The Economic Cycle Research Institute economic index rose from 122.1 to 122.3 in the latest week.

Former European Central Bank official Lucas Papademos was sworn in as Greek Prime Minister.

The PDL party of outgoing Italian Prime Minister Silvio Berlusconi has indicated its support for a new technocrat government led by former European Commissioner Mario Monti.

European shares posted solid gains on Friday as Italy attempted to shore up its political and economic position. The Italian Senate approved a new budget law and investors were hopeful about the appointment of a new emergency government. The FTSEurofirst index rose by 2.1pct on Friday to end 0.5pct higher over the week. The UK FTSE rose by 1.9pct and the German Dax gained 3.2pct.

US shares rallied on Friday in response to encouraging news from Europe and firmer US economic data. Shares in Walt Disney rose 6pct after its profit result beat forecasts. The Dow Jones rose by almost 260pts or 2.2pct with the S&P 500 higher by 2.0pct and the Nasdaq gained 53.6pts or 2.0pct. Over the week the Dow Jones rose for the sixth time in seven weeks, lifting by 1.4pct. The S&P 500 rose by 0.9pct but the Nasdaq lost 0.3pct.

The US government bond market was closed for the Veterans Day holiday. Over the week US 2yr yields rose less than a point to 0.234pct while US 10yr yields rose 2pts to 2.06pct.

Major currencies rose against the greenback In European and US trade on Friday. The Euro rose from lows near US$1.3605 to near US$1.3795 and ended US trade near US$1.3745. The Aussie dollar rose from lows around US101.05c to US103.05c, and ended US trade at US102.70c. And the Japanese yen eased from JPY77.55 yen per US dollar to JPY77.05, ending US trade near JPY77.10.

US crude oil prices rose on Friday as the US dollar fell and Italy and Greece both attempted to deal with debt and deficit issues. Nymex crude oil rose by US$1.21 or 1.2pct to US$98.99 a barrel and London Brent crude rose by US45c to US$114.16 a barrel. Over the week, Nymex crude rose by 4.8pct while Brent rose by 2.0pct.

Base metal prices generally rose on the London Metal Exchange on Friday in response to encouraging political news with metals lifting between 1.0-3.4pct. But nickel lost 0.4pct. Over the week base metals were generally weaker between 0.6-4.3pct with nickel faring worst. But aluminium rose 1.2pct. And the gold price rose in line with other commodities on Friday as the greenback fell with the Comex December gold price up by US$28.50 an ounce or 1.6pct to US$1,788.10. Over the week, gold rose by US$32.00 or 1.8pct.

Ahead: In Australia, lending finance and credit & debit card data are released. In the US, no major data is scheduled.