Australian Stock Market Report – Morning 4/7/14

US MORNING REPORT
(5.15am AEDT)

In US economic data, non-farm payrolls (employment) rose by 192,000 in March, just short of the median forecast tipping a rise of 200,000 jobs. The unemployment rate was steady at 6.7%. Average earnings were flat and the work week rose from 34.3 hours to 34.5 hours.

European shares rose on Friday. US economic data was broadly in line with forecasts while merger and acquisition activity boosted investor interest in the sharemarkets. The world´s two biggest cement makers - Lafarge and Holcim - said that they were in merger talks. The FTSEurofirst 300 index rose for the ninth straight session, up by 0.8% with the UK FTSE and German Dax both up 0.7%. Mining shares were higher in London trade with shares in BHP Billiton up by 1.8% while Rio Tinto lifted 1.9%.

US sharemarkets fell on Friday as investors took profits on high-flying momentum stocks in the technology and biotech sectors. The Dow Jones index fell by almost 160 points or 1.0% with the S&P 500 down 1.3%, while the Nasdaq slumped by 110 points or 2.6%. Over the week the Dow rose by 0.6%, the S&P 500 rose by 0.4% but the Nasdaq lost 0.7%.

US treasury prices were firmer on Friday (yields lower). US economic data wasn´t as strong as some feared while investors also moved funds from equities into bonds. US 2 year yields fell by 5 points to 0.415% while US 10 year yields were down by 7 points to 2.726%. Over the week US 2 year yields fell by 1 point while US 10 year yields were flat.

Major currencies were generally firmer against the greenback after the finish of the European and US sessions on Friday compared with the Asian markets close. The Euro gravitated between US$1.3670 and US$1.3730, before ending US trade around US$1.3700. The Aussie dollar rose from lows near US92.30c to highs near US93.05c before finishing US trade around US92.90c. And the Japanese yen firmed from 104.09 yen per US dollar to JPY103.19 and was near JPY103.31 at the US close.

World oil prices rose on Friday in response to encouraging US jobs data and continued doubts that Libyan oil exports would lift in the short term. Brent crude rose by US57c or 0.5% to US$106.72 a barrel while US Nymex rose by US85c or 0.8% to US$101.14 a barrel. Over the week, Brent crude fell by US$1.35 or 1.2% and Nymex fell by US53c or 0.5%.

Base metal prices were mixed on the London Metal Exchange on Friday with gains or losses not exceeding 1.0%. Copper, aluminium and tin fell and other metals rose. Over the week nickel rose 4.3% and aluminium rose 4.1% but copper fell 1.0%. The gold price rose on Friday with the Comex futures quote up by US$18.90 an ounce to US$1,303.50 per ounce. Over the week gold rose by US$9.70 an ounce or 0.7%. Iron ore rose by US20c to US$115.70 a tonne on Friday and rose by US$3.40 over the week.

Ahead: In Australia job advertisements and tourist arrivals data are scheduled. In the US, consumer credit and the employment trends report are released.

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