The US economy grew at a 2.0pct annual pace in the September quarter, in line with market expectations. Encouragingly consumer spending grew at a 2.6pct annual pace.

The US employment cost index rose by 0.4pct in the September quarter, just short of forecasts for a 0.5pct rise. US consumer sentiment eased from 68.2 to 67.7 in October. The Chicago purchasing managers index surprisingly rose from 60.4 to 60.6 in October.

European shares rose slightly on Friday with investors more focussed on next week´s Federal Reserve meeting. The FTSEurofirst index rose by 0.2pct, but while the UK FTSE fell 0.1pct, the German Dax gained 0.1pct.

US sharemarkets ended flat on Friday with economic data meeting expectations. The Dow Jones rose by 4.5pts or less than 0.1pct but the S&P 500 was flat as was the Nasdaq. Over the week the Dow fell by 0.1pct but the Nasdaq lifted 1.1pct. Over the month the Dow posted its best October gain in four years, up 3.1pct. The S&P 500 rose 3.7pct and the Nasdaq soared 5.9pct.

US treasuries rose on Friday (yields lower) as traders focussed on this week´s Federal Reserve meeting. US 2yr yields fell 3pts to 0.34pct, and US 10yr yields fell 5pts to 2.60pct. Over the week US 2yr yields fell by 2pts and US 10yr yields rose by 5pts.

After easing in early morning European trade, major currencies bottomed against the US dollar around 11am London time and rallied strongly against the US dollar. The Euro lifted from lows of US$1.3810 to US$1.3930, ending US trade near US$1.3945. The Euro has lifted to US$1.3965 this morning. The Aussie dollar rose from US96.90c to US98.20c before ending US trade at US98.35c. The Aussie has lifted to US98.45c this morning. And the Japanese yen strengthened from lows of 80.85 yen per US dollar to JPY80.45, ending US trade near the strongest levels. The yen is at JPY80.30 this morning.

US crude oil prices fell on Friday with traders citing flat economic growth and the expiry of refined products contracts for the drop in prices. The Nymex crude oil contract fell by US75c or 0.9pct to US$81.43. Oil fell by US17c over the week.

Base metal prices fell on the London Metal Exchange on Friday. Zinc lost 2.9pct, lead fell by 2.2pct and copper dropped 1.7pct but other metals only eased slightly. Over the week base metal prices fell between 0.8-3.6pct with aluminium faring best and zinc falling the most. But the gold price posted solid gains as the US dollar fell with the Comex gold futures price higher by US$15.10 an ounce to US$1,357.60. Gold rose 2.5pct over the week.

Ahead: In Australia, the monthly inflation gauge, ABS house price index and the Performance of Manufacturing index are released. In the US personal income, the ISM manufacturing index and construction spending are due.

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