Australian Stock Market Report - Morning
US non-farm payrolls (employment) rose by 39,000 in November, well short of expectations for a gain of 130,000. The unemployment rate rose from 9.6pct to 9.8pct. Meanwhile the US ISM services index rose from 54.3 to 55.0 in November, slightly ahead of forecasts centred on a result near 54.8.
According to the UK Sunday Telegraph Rio Tinto is poised to launch a $2 billion takeover offer for African coal developer Riversdale Mining.
European shares closed largely flat on Friday with a weaker-than-expected US jobs report balanced against an encouraging report on the US services sector. The FTSEurofirst index fell by 0.1pct, with the UK FTSE lower by 0.4pct while the German Dax lost 0.1pct. Over the week the FTSEurofirst index rose 1.7pct.
US sharemarkets posted modest gains on Friday with investors maintaining optimism despite a weak jobs report. The Dow Jones rose by almost 20pts or 0.2pct with the S&P 500 higher by 0.3pct and the Nasdaq was up 12pts or 0.5pct. Over the week the Dow rose by 2.6pct while the S&P 500 was up 3.0pct and the Nasdaq finished higher by 2.2pct.
US treasuries were mixed on Friday. Traders were wary of $66bn of debt issuance in the coming week but they also concluded that easy monetary policy will be maintained for some time. US 2yr yields fell 7pts to 0.475pct but US 10yr yields rose 2pts to 3.007pct. Over the week US 2yr yields fell by 6pts but US 10yr yields rose by 13pts.
The US dollar slumped against major currencies in European and US trade on Friday as investors perceived that US authorities will need to maintain an easy monetary policy stance for an extended period. The Euro rose from lows near US$1.3200 to US$1.3430, ending US trade near US$1.3415. The Aussie dollar rose from lows near US97.50c to US99.35c, before ending US trade near US99.20c. And the Japanese yen lifted from levels near 83.85 yen per US dollar to JPY82.50, ending US trade near JPY82.65.
US crude oil prices rose to fresh 2-year highs on Friday. The continued cold snap in Europe and fears of colder weather in the US Northeast added to supply concerns while a weaker US dollar improved the purchasing power for buyers in Europe and Asia. The Nymex crude oil contract rose by US$1.19 or 1.4pct to US$89.19 a barrel. Oil soared by 6.5pct over the week.
Base metal prices fell on the London Metal Exchange on Friday as investors chose to take profits after a solid week of gains. Zinc lost 2.0pct, lead fell by 1.5pct and aluminium dropped 1.2pct. But over the week base metal prices posted solid gains of between 2.6pct and 5.8pct with copper doing best. But the gold price rose on Friday in line with the oil price in response to a weaker greenback. The Comex gold futures price rose by US$16.90 an ounce to US$1,406.20. Gold rose by 3.2pct over the week.
Ahead: In Australia, the inflation gauge and job advertisement data are released. In the US the employment trends index is released.
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