Australian Stock Market Report - Morning 2/7/2011
US non-farm payrolls (employment) rose by just 36,000 in January. While the report was well short of expectations of job gains near 148,000, weakness was attributed to harsh snow storms in the month. But the jobless rate plunged from 9.4pct to 9.0pct - the lowest level since April 2009. Hourly earnings jumped by 0.4pct.
European shares rose slightly on Friday as investors debated a mixed US payrolls report. Construction and utility stocks were most in demand. The FTSEurofirst index rose by 0.1pct, with the UK FTSE up 0.2pct and German Dax higher by 0.3pct.
US sharemarkets rose on Friday as investors shrugged off tepid jobs growth, preferring to focus on positive forward indicators released earlier in the week. At the close of trade, the Dow Jones index was up 29.9pts or 0.3pct with the S&P 500 up 0.3pct and the Nasdaq was higher by 15pts or 0.6pct. Over the week the Dow Jones rose by 2.3pct with the S&P up 2.7pct and Nasdaq lifted by 3.1pct.
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US treasuries fell on Friday (yields higher) as investors fretted that inflation could prove stronger-than-expected over 2011. US 2yr yields rose by 3pts to 0.75pct and US 10yr yields lifted by 9pts to 3.64pct. Over the week US 2yr yields rose by 20pts - the most since June 7 2009. And US 10yr yields rose by 31pts.
Major currencies eased against the US dollar during US trade on Friday. The Euro fell from highs near US$1.3645 to US$1.3545 before ending US trade near US$1.3580. The Euro has softened to US$1.3550 this morning. The Aussie dollar fell from highs around US101.95c to US101.10c, but lifted to near US101.40c in late US trade. The Aussie has softened to near US101.10c this morning. And the Japanese yen fell from 81.50 yen per US dollar to around JPY82.45, and closed US trade near JPY82.20.
US crude oil prices fell by almost 2pct on Friday in response to unfounded speculation that Egypt´s President Mubarak could step down over the week-end. Investors also chose to take profits as the US dollar rose. The Nymex crude oil contract fell by US$1.51 (1.7pct) to US$89.04 a barrel. And London Brent crude fell by US$1.93 to US$99.83 a barrel. Over the week Nymex crude fell by US30c while Brent rose by US41c.
Base metal prices rose on the London Metal Exchange on Friday. Metals rose 0.4-1.5pct with nickel doing best. Over the week metals generally rose between 5.3-6.7pct but aluminium lagged with a 2.5pct gain. But the gold price eased on Friday in line with oil in response to a stronger greenback. The Comex gold futures price fell by US$4.00 an ounce to US$1,349.00. Gold rose by US$8.30 an ounce over the week.
Ahead: In Australia, job advertisements data is released together with retail trade. In the US, consumer credit data is released.